Being in a good-performing superannuation fund may give members a “glow” but there will likely be unintended consequences from the Your Future, Your Super (YFYS) policy, according to the CFA Institute.
In a webinar discussing trust in financial services, Maria Wilton non-executive director at the CFA Institute said the YFYS performance test meant those members in a good fund felt more positive.
She said: “Your Future, Your Super has a bit of a glow, I think people think they are in a good fund, that is putting members’ interest first and that can make people feel good but at the same time, there are unintended consequences.
“My strong preference is for the industry to step up and regulate itself and then it’s likely we have a much clearer idea of what the unintended consequences will be.
“Some of the regulation we have seen, or talked about, over the last 12 months has been a solution in search of a problem and I think that’s unhelpful.”
She likened it to the Future of Financial Advice (FOFA) which brought in best interests duty and bans of conflicted forms of remuneration.
“Nearly 10 years with FOFA regulation, that was expressly put in place to improve trust and financial outcomes in the industry and really, it might have taken baby steps but it didn’t really achieve its end purpose.”