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Super Consumers welcome Banking Royal Commission reforms

New Banking Royal Commission reforms introduced to Parliament today will make superannuation consumers better off.

Super Consumers Australia welcomes the important Financial Services Royal Commission reforms introduced by the government into Parliament today.

The Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 will further protect people in the superannuation market and ultimately boost the retirement savings of Australians. One of the central reforms includes an end to unsolicited selling, or 'hawking', which saw people sold into poor quality superannuation products.

"The cost of being sold into a poor quality super fund can mean the difference between a comfortable retirement or struggling to pay the heating bill", said Xavier O'Halloran, Director of Super Consumers Australia. 

"We're especially pleased that the new legislation makes it crystal clear that it's illegal to hawk a member of a MySuper product into a choice product offered by the same fund. The complementary reforms announced in the Federal Budget to end the creation of duplicate accounts make it even more important that people end up in a single quality fund and are not sold a lemon," says O'Halloran.

The reforms will also strengthen the arm of the regulator and allow them to protect individual members who have had their retirement savings jeopardised by the misconduct of superannuation funds.

"The expanded consumer protections will see much more scrutiny of the conduct of superannuation funds and their impact on individual members. This is about getting the balance right between system wide goals and benefiting individuals," says O'Halloran.

We note that the government is still to act on Hayne's recommendations on financial advice, in particular the charging of ongoing advice from superannuation. As the Royal Commission found, in many cases this advice was of little to no value and had a serious impact on eroding people's retirement savings.

"We look forward to the government introducing this legislation as soon as possible to support the advice market in transitioning to provide higher quality, more affordable assistance to Australians," says O'Halloran.

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Media Contact:

Xavier O'Halloran

Director, Super Consumers Australia

0415 823 607

xohalloran@superconsumers.com.au