ASIC/APRA focus on super underperformance

Just a day after the Australian Securities and Investments Commission (ASIC) signalled a tough approach on super fund underperformance, the Australian Prudential Regulation Authority (APRA) has sent a similar message to the sector.

The regulator specifically pointed to superannuation fund under-performance as a key ongoing focus in its corporate plan covering the next five years.

It said many superannuation products delivered good outcomes for the majority of superannuation members in a stable environment but said there remained areas of persistent underperformance in the industry, as highlighted by the Productivity Commission (PC).

The APRA corporate plan said the Royal Commission had also outlined specific examples where superannuation trustees did not appear to be putting members’ interests first, highlighting concerns with governance and management of conflicts of interest.

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“A lack of comparable and transparent information makes it difficult for superannuation members to make informed decisions and there are few products available in the market to manage longevity risk,” it said.

The APRA Corporate Plan followed on from that of ASIC and a speech by its chair, James Shipton, in which he said the regulator was committed to taking action against trustee misconduct and that it would be looking particularly at trustee behaviour that caused monetary loss to members, financial exclusion, loss of market integrity and confidence and behaviour that undermines competition.