The announcement last week of a royal commission into banking was not so much of a surprise. We all thought Malcolm would crumble. But the inclusion of super funds and insurance companies in the inquiry definitely was a surprise.
For a well-reasoned discussion check out Cuffelinks.
Graham Hand, the editor and co-owner of Cuffelinks, who is a former CFO at Colonial First State, has previously been a critic of the notion that we should have a royal commission into the banks. And he is still critical. But he at least is able to study the issues dispassionately. The inclusion of super funds in the terms of reference to the inquiry is difficult to understand, except on self-serving political grounds.
Big not-for-profit super funds, which started to mushroom in 1986 with the introduction of Award Super, have, without a doubt, served the country well. Firstly, it was the insurance element, and then, over time, the savings have kicked in. Super is now the second-biggest asset for most retirees after their home
Workers who would have otherwise retired with not much, are now also more comfortable. They have life insurance they would otherwise never have had.
And, the big surprise in the development of our industry was how well the two sides of the debate got on. That is: the employers, usually represented by an industry association, and the unions. They have invariably come together in harmony (for once) and produced results for members which have been far better than they would have otherwise got from the commercial world. That’s a fact.
All big super funds have their own financial planning providers or a link to a service which does so – always on a fee-for-service basis. To group them in with the so-called financial advice arms of banks is difficult to fathom.