Revamp for super system: Financial Services Royal Commission recommends change

Although most media coverage following release of the Final Report from the Hayne Royal Commission has been about its impact on Australia’s banking system, the fallout for the super and financial advice industries is likely to be every bit as significant.

The three-volume final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (FSRC), is likely to result in major change for the super industry – both for super fund members and for trustees and executives managing the large super funds holding most Australian employees’ retirement savings.

Financial advisers are also likely to find their world upended yet again, with the FSRC report containing some significant recommendations in relation to their independence, advice fees and disciplinary system.

To help you understand the implications of the FSRC final report on your super fund and financial advice provider, SuperGuide has prepared an overview of the key points in each area.

FSRC final report: 5 areas that could change your super and financial advice

1. Super fund member accounts

A major change recommended in the FSRC report is that employees should only have one default super account and they should not be defaulted into a new super fund every time they change jobs. To assist with this, the report recommends a new mechanism be developed to ‘staple’ people to a single default super account.

If you have your super savings in a MySuper account, the payment of any fees for financial advice from your account balance will be banned. However, fees for simple intra-fund advice on things like consolidating multiple super accounts, selecting a super fund, or changing your investment option will be permitted.