The Royal Commission turns its attention to superannuation on Monday as it kicks off two weeks of public hearings in Melbourne. After the fireworks of previous hearings it promises to an engrossing fortnight.
Formally, the inquiry is scheduled to examine how responsible superannuation entity licensees “fulfil their duties to members of regulated superannuation funds and the extent to which structural or governance arrangements may affect the fulfilment of those duties”.
It will also examine how superannuation is sold; the relationships that exist between financial advisers and trustees; the effectiveness of APRA and ASIC as regulators; and how super funds engage with their Aboriginal and Torres Strait Islander members.
And all of this is to be done through the royal commission lens of examining where “any conduct, practices, behaviour or business activities…fall below community standards and expectations”.
Before the public hearings of the royal commission got underway in March, CoreData research found that trust in superannuation was greater than in banking and in financial advice. The trust rating is the percentage of people who rate trust in a sector as six or higher on a scale from zero to 10, where zero means complete distrust and 10 means complete trust. A score of six or higher means they consider the sector more trustworthy than untrustworthy (see chart). Both of banking and financial advice have had their moments in the spotlight and trust in both has declined markedly.
Now it’s superannuation’s turn. Already a kind of “mistrust contagion” has affected the sector, with trust in super declining by 20 percentage points since April, but even so, as the hearings get underway it remains the only sector trusted by more people than it is distrusted by.