The Federal Government and APRA must act quickly on the recommendations of the APRA Capability Review, or risk leaving consumers further exposed to the exploitation and misconduct we saw during the Royal Commission, Industry Super Australia (ISA) says.
ISA Acting Chief Executive Matthew Linden today welcomed the findings and recommendations of the APRA Capability Review and the need to strengthen the regulatory framework to put members’ interests first.
“This review has exposed a culture of under-reporting, poor regulation and enforcement and a failure to adequately protect consumers from exploitation and misconduct,” he said.
“This review and its recommendations must give APRA the impetus it needs to go after those parts of the sector that exploit vulnerable members for their own financial gain.
“It confirms what the Royal Commission already told us – that consumers have not only been let down by the institutions that perpetrated the misconduct, they have ultimately been let down by the regulator,” he said.
“The Government and APRA have an obligation to members to act quickly on these recommendations, and put in place the necessary capability, regulatory and enforcement frameworks to take action against those who have committed wrong-doing.”
In its submission to the Capability Review, ISA argued for a more transparent, strengthened regulatory scheme where institutions who do the wrong thing are held to account, and member benefit comes first.
ISA also argued for a greater focus on superannuation regulation and reporting, noting the current discrepancy in APRA’s reporting and regulatory frameworks between superannuation and other financial sectors has left members’ vulnerable to exploitation.
ISA welcomes the recommendations relating to APRA’s supervision of superannuation. In particular, we welcome the following recommendations:
1. Embed, publish, performance benchmarks for super funds and take action on underperforming funds that consistently fail on Member Outcomes and make APRA’s mandate explicit
2. Develop a superannuation performance tool
3. Update its superannuation reporting standards and collect product level data that facilitates accurate assessments of outcomes and comparability across funds and to crack down on non-reporting.
While supportive of the recommendations, Mr Linden said it was important APRA applies it powers fairly, and prioritises decisions and regulatory action in the areas where member harm is the highest.
“We expect any new powers to be applied by APRA in an even-handed way, with appropriate checks and balances, with members’ best interests at its heart,” he said.