Financial Service Inquiry – Submission Deadline 31 March 2014

The Financial Services Inquiry is charged with examining how the financial system could be positioned to best meet Australia’s evolving needs and support Australia’s economic growth. Following the Terms of Reference released by Treasurer, Joe Hockey on 20 December 2013, the deadline for first submissions was 31 March 2014.  Over 200 submissions have been received.

ASFA used its submission, to assert that the  superannuation system must operate under frameworks that drive good retirement outcomes and prudent investment strategies.  ASFA cautioned against using mandates for investment allocation, preferring market forces to determined the flow of capital but pointed to impediments to investing in  certain asset classes which, if removed, would help match the risk and return superannuation funds require.   ASFA also highlighted the impact of the rise of individual decision making and  the high duty of care that needs to be applied to superannuation, recognising systemic risks which exist over the 3 areas of pooled funds, SMSF’s and retirement assets.  ASFA also asked the Inquiry to consider the linkages between superannuation and the social security and tax systems, and called for additional focus on the needs of developing electronic payment systems and online connectivity.

The Financial Services Council (FSC) echoed the technology focus, saying in its submission, that consumers now have a preference for digital engagement.  John Brodgen, CEO of FSC stated, “Developments in technology have outpaced developments in regulation.” The FSC asked the Inquiry to ensure regulation is technology neutral so that it can evolve as technology changes, and called for a new disclosure regime, which recognises that consumers prefer digital engagement and the ability to access piece by piece information.

The Australian Institute of Superannuation Trustees (AIST) asked for improved coordination in the regulatory framework, between APRA, ASIC and the ATO to improve efficiency and reduce red tape. The AIST also put forward consideration for APRA and the ATO to be given powers to supervise systemic risks (including technology risk) accross the pooled superannuation and SMSF sectors, for ASIC to be given stronger consumer protection powers, and for support to be granted for a diverse range of governance structures within superannuation.




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