Australians do not trust banks with their super, 7 out of 10 want not-for-profit system, new polling reveals
Explosive new polling shows that when it comes to superannuation, most Australians don’t trust the big banks and over two-thirds want the system to run on a not-for-profit basis with all returns to members.
The Essential poll of 1000 people, commissioned by Industry Super Australia, has found that only 31% trust that the banks will ensure the superannuation system works in their best interest. This compares to 38% for the Federal Government; 61% for the Fair Work Commission; and 69% for Industry Super Funds.
Consumers feel strongly that their interests should be the sole focus - 70% believe all super funds should be not-for-profit with all returns to members rather than split with shareholders; just 6% disagree.
Industry Super Australia chief executive, David Whiteley, says the results send a clear message the public want superannuation to work solely in their interests and not as a profit-making opportunity for the banks’ wealth management machines.
“When it comes to super, the banks are legally required to act in the best interest of their customers; most Australians don't believe they do," said Whiteley.
“Consumers know aggressive cross-selling of advice, insurance and super is designed to boost shareholder profits rather than leave them better off.”
“The banks’ relentless lobbying to remove consumer default protections could result in people ending up in under-performing funds and a nest egg that’s tens, even hundreds, of thousands of dollars short”.
“Australians have told us what they think – they don’t trust the banks and believe their culture and profit motive are at odds with the purpose of super,” said Whiteley.
It is a sentiment shared by 58% of respondents who believe the banks would use the compulsory nature of super to exploit fund members.
Two thirds of Australians agree that the banks are already too powerful and giving them more of the superannuation market would make the situation worse.
Instead 57% want a small number of high quality super funds run by trusted providers rather than a large menu of bank offerings.
“Public opinion clearly runs counter to the banks’ efforts to change the super system to suit their vertically integrated business models. Astute policymakers will be listening,” said Whiteley.
The big bank CEOs will appear before a parliamentary inquiry this Friday and early next week. The Standing Committee on Economics’ Review of the Four Major Banks hearings are set for 3, 7, 8 March.
ASIC has recently launched court proceedings against Westpac for a 3-year sales campaign that alleges staff were rewarded bonuses for shifting customers from external super funds into a bank fund. ASIC alleges that Westpac failed its best interests duty to consumers; breached financial licence conditions and Corporations Law and failed to ensure related financial services entities provided services honestly and fairly.
David Whiteley is available for interview. Media contact: Phil Davey 0414 867 188
Industry Super Australia provides policy, research and advocacy on behalf of 15 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of five million Australians.