Super industry welcomes appointment
Assistant treasurer-elect Arthur Sinodinos will take responsibility for Australia’s $1.6 trillion superannuation industry, but the title will go.
The industry was unsure on Monday when a minister for superannuation was not listed in Tony Abbott’s ministry.
But returning the sector to Treasury is not new; Labor introduced the country’s first superannuation minister, Nick Sherry, in 2007.
The Coalition’s former spokesman for superannuation, Mathias Cormann, has been promoted to finance minister. As expected, Joe Hockey will be treasurer, Steven Ciobo will be parliamentary secretary to the treasurer and Arthur Sinodinos will serve as assistant treasurer.
Alex Dunnin, director of research at super research firm Rainmaker, said putting super into the hands of Senator Sinodinos was ”probably a real stroke of luck for the sector as Sinodinos seems one of the most level-headed players in the whole cabinet, at least among the heavyweights”.
He added that Senator Sinodinos might ”also signal that the government doesn’t really have much interest in more superannuation or financial services reform, or even fussing too much with rolling things back.
”The industry will welcome the appointment … but I suggest the smarter players in the retail side of the trade will not be overly rapt, at least if they were expecting more restructuring.”
John Brogden, chief executive of the Financial Services Council, said ”as a former Treasury economist and chief of staff to John Howard, Arthur Sinodinos has unparalleled experienced for the role as assistant treasurer”.
David Whiteley, head of the industry super lobbying group Industry Super Network, said Senator Sinodinos had ”considerable experience in financial services”.
The announcement comes as the corporate regulator said it was scrutinising the aggressive marketing of property to self-managed superannuation funds, which account for almost one-third of the enormous industry’s total assets. ”ASIC [Australian Securities and Investments Commission] is also experiencing an increase in reports of misconduct about aggressive marketing of investments, notably direct property, through SMSFs,” it said in a consultation paper released on Monday.
And ASIC weighed into the debate over the minimum size for a fund, noting many industry participants question whether $200,000 is enough to establish a SMSF.
ASIC wants Australian financial services licensees to warn clients that SMSF investors are not entitled to compensation due to fraud or theft, after a parliamentary inquiry found SMSF investors in the collapsed Trio Capital were not aware they were ineligible or to other risks associated with SMSFs.
ASIC said financial planners and accountants should disclose the ”potentially significant” costs associated with managing a SMSF.