The final Royal Commission report has recommended banning advice fees from MySuper accounts, limiting fees for choice accounts and prohibiting the unsolicited sale or offer of super products.
“Deduction of any advice fee, other than for intra-fund advice, from superannuation accounts other than MySuper accounts should be prohibited unless the requirements about annual renewal, prior written identification of service and provision of the client’s express written authority in connection with ongoing fee arrangements are met,” the report stated.
The report has also called for the hawking of superannuation products to be prohibited.
“That is, the unsolicited offer or sale of superannuation should be prohibited except to those who are not retail clients and except for offers made under an eligible employee share scheme,” it said.
“The law should be amended to make clear that contact with a person during which one kind of product is offered is unsolicited unless the person attended the meeting, made or received the telephone call, or initiated the contact for the express purpose of inquiring about, discussing or entering into negotiations in relation to the offer of that kind of product.”
The report said that a person to whom an unsolicited offer is made will “very often not be in a position to judge the merit of what is offered”.
“In particular, that person will seldom if ever be in a position to compare what he or she is offered with what he or she already has under some existing superannuation arrangement,” it said.
“That is why the attempts by ANZ and CBA to sell superannuation in bank branches under a ‘general advice’ model may have contravened the law.”
The report also recommended stapling a person to a single default account in order to eliminate multiple accounts when they enter the superannuation system.
It also called for tougher penalties for breach of covenants and obligations from trustees of funds regulated by APRA - ie, funds that are not self-managed.
“Breach of the trustee’s covenants set out in section 52 or obligations set out in section 29VN, or the director’s covenants set out in section 52A or obligations set out in section 29VO of the SIS Act should be enforceable by action for civil penalty,” it said.