The restrictive fee arrangements in MySuper products will prevent members from receiving advice, and will ultimately see them become less engaged with their retirement savings, according to Corporate Super Specialist Alliance (CSSA) president Douglas Latto.
MySuper runs counter to the stated objective of Parliamentary Joint Committee chair Bernie Ripoll to increase the engagement and interest people have in their superannuation, Latto said.
Corporate super specialists - who currently provide "proactive financial education services to millions of employees via their corporate super funds in the workplace - will not be able to be appropriately remunerated under MySuper," Latto said.
"Going forward, commissions on group life insurance are being banned in MySuper. And we will not be able to charge an explicit fee, even if agreed with the employer, because that's going to be banned as well. So the only way we can get rewarded is through this new concept called 'intra-fund advice' that's going to be hidden inside the administration fee," Latto said.
The CSSA was in a situation where the fee would not be set by the person who provides the financial advice or the person who receives the advice - it would be set by the trustee of the fund, Latto said.
"MySuper is going to be judged on a cost basis, and people will try to minimise that cost. And if they minimise that cost, [the CSSA] won't be able to get an income that would support us to be able to provide the service that we do today," he added.
Latto pointed to research conducted by CoreData on behalf of the Association of Financial Advisers that showed the services provided by CSSA advisers were highly valued by employees.
"The research also confirmed our belief that if our services were not available, many employees would not actively seek out financial services education and advice. It really doesn't make sense to introduce measures which will remove consumer access to our services," Latto said.