New polling shows that when it comes to superannuation, most people want a system run on a not-for-profit basis with all returns going to members rather than creating an increased role for private financial institutions.
The Essential poll of 1000 people, commissioned by Industry Super Australia, found that only 31 per cent believed the banks will ensure the superannuation system works in their best interest. This compared to 38 per cent for the federal government; 61 per cent for the Fair Work Commission; and 69 per cent for Industry Super Funds.
Consumers felt strongly that their interests should be the sole focus of the owners of super funds. Some 70 per cent of those surveyed believed all super funds should be not-for-profit with all returns to members rather than split with shareholders; just 6 per cent disagreed.
Industry Super Australia chief executive David Whiteley said the results send a clear message the public want superannuation to work solely in their interests and not as a profit-making opportunity for the banks and their wealth management machines.
“When it comes to super, the banks are legally required to act in the best interest of their customers; most Australians don’t believe they do,” Mr Whiteley said.
Consumers believe aggressive cross-selling of advice, insurance and super by the private sector is designed to boost shareholder profits rather than leave fund members better off, he said.
“The banks’ relentless lobbying to remove consumer default protections could result in people ending up in under-performing funds and a nest egg that’s tens, even hundreds, of thousands of dollars short.
“Australians have told us what they think – they don’t trust the banks and believe their culture and profit motive are at odds with the purpose of super.”
The survey comes as the Turnbull government has renewed its commitment to mandating the appointment of independent directors and chairs to all super funds. A review by former Reserve Bank governor Bernie Fraser produced for the not-for-profit super sector rejected such a move in February.
However, in response to the Fraser review, the government affirmed its commitment to its planned changes, which were dropped as a result of a hostile Senate in the last Parliament. The current makeup of the Senate means any such move will face great difficulty in becoming law.
Mr Whiteley said the survey showed 58 per cent of respondents thought the banks would use the compulsory nature of super to exploit fund members.
Two thirds of respondents rejected increasing the influence of the banks in superannuation.
“Public opinion clearly runs counter to the banks’ efforts to change the super system to suit their vertically integrated business models. Astute policymakers will be listening,” Mr Whiteley said.
The Parliamentary Standing Committee on Economics will conduct a review of the major banks from this Friday. The CEOs of the major banks will appear before it. The New Daily is owned by industry super funds.