Australia has about $1.5 billion in pooled members’ superannuation balances.
Whose responsibility is it to reduce the disastrous losses of savings from corporate failures.
Maybe there is nothing we can do to prevent them. Maybe we just don’t have the resolve to bring in changes that might encroach on the privileges of some.
We should at least look at the problems and find out what can be done better.
This post is written as a consumer with an interest in financial affairs, who would like to see more safe-guards for our retirement savings. He wishes our parliament not to pass the proposals to change the current Future of Financial Advice legislation designed to protect consumer interests. Particularly at issue are measures to put at arm’s length from advisers so-called conflicted remuneration payments by endorsing instead annual bonus payments based on productivity. The views are his own; they may not be adequately informed and/or may lack practicality.
The need for reform has become increasingly clear following a Senate Inquiry into the advice given to over 1100 customers of the Commonwealth Bank in the wake of the global financial crisis of 2008. Particularly blame-worthy were a group of about a half-dozen financial advisers one of whom was responsible for over $350 million in customer losses. Adding to concerns has been a bank culture which permitted, even encouraged customer losses, and tried to dishonestly cover them-up when disclosed by whistle-blowers. Furthermore the regulatory authority ASIC failed to take prompt action when informed of these abuses.
Media interest has been raised by the release of an interim report of David Murray’s wide-ranging Inquiry into the Financial Industry. In interviews he agrees that conflicted remuneration risks diminishing the quality of financial advice, and concurs with the findings of the Senate Inquiry.
I have posted reviews of three corporate failures that have robbed investors of their retirement savings.
My understanding of the bankruptcy of Banksia Securities is that it was precipitated by falls in property asset prices after the GFC, in an otherwise sound business enterprise. The lesson for investors is that pooled property investments can be quite risky.
I have received two email communications which I think quite eloquently describe the misery of those who have lost their hard worked-for savings.
Hello Mr. Robson; I just read your article (I found the link while trying to find the Bookmakers super fund phone number) .
I could not agree with you more with what you wrote in your article .Myself and countless others were swindled by this so-called Fund. Personally I lost close to
$400.000.00 . I still have funds frozen in the fund and they have dwindled from $180.000.00 to just $95.000.00 the last time I checked .
One reads about these things happening to other people and feels sorry for them. Now it has happened to me.
Personally I don’t think I’ll ever see a cent of what is left of my funds .
Hi, Ken. I am another refugee of the Bookmakers super Fund [ now rebadged Progress super ] and when, in December 2013, I eventually received my previous year super statement this is what it said to me.
The Super Statement:
You trusted us, what a fool
We’ve taken your money and there’s nothing you can do.
It might seem we are mocking you but we just don’t care.
Don’t care to respect that your future is blighted.
Don’t care to respect the long hours of work, discipline of saving, the denial to accumulate.
Now, we have ours [ who cares that it was yours] and there’s nothing you can do about it.
What’s that? Go to the big umpire. O.K. but you’ll find them busy polishing their badge.
No, we’re not even sorry. It’s just business. Too good to pass up.
The sheer volume of funds in super cannot but attract sharks; what’s needed is ongoing, effective policing without which faith in super as a safe refuge for people’s retirement funds will dissolve. Thanks for the forum. P.S. my apologies to the amphibious sharks.
Experiences such as this are deeply concerning. We are fortunate to have someone of the calibre of David Murray conducting a wide-ranging enquiry, but will there be the will to carry out his recommendations and to do whatever it takes to stop the swindlers in society from preying not just on the wealthy but those less well off who have accumulated savings for their retirement.
Managed fund investments, annuities, and listed entities such as Exchange Traded Funds, Listed Investment Companies (LICs) and diversified portfolios are conservative and reliable investments. Their suitability is not questioned.
But should the products of developers and entrepreneurs be recommended without close scrutiny of the risks involved? Ventures that have been unable to get equity or debt funding, and can offer little seed capital themselves are unlikely to be safe for superfunds. If project accreditation was required before receiving funding, ASIC might then have a bargaining tool, removing accreditation, and freezing assets, when profitability was in doubt.
In the future it is likely that governments will wish to use superfund reserves to fund important infrastructure spending. Who is to vet and approve these projects? Should investors not have a say in how their money is invested?