ASIC reads the riot act to the super industry: Longo

ASIC chair Joe Longo has hailed the superannuation industry's $4.1 trillion war chest, which is larger than the ASX's total market capitalisation, as an impressive achievement.

But for all its size and influence, Longo reinforced at the AmCham Regulator Luncheon Series that the regulator has exposed shortcomings and blind spots with regards to super fund's governance and customer service.

"ASIC's work has laid bare governance challenges, and exposed super trustee board blind spots around their data, systems, and processes. For example, our death benefits review found that even the fastest trustees processed less than half (48%) of their death benefit claims within three months. The slowest processed only 8% in that time," Longo said.

"No matter how you look at it, that's a long time for your loved ones to be waiting..."

Not a single trustee in that review bothered to monitor or report on end-to-end death benefit claims handling times, nor did they have performance objectives for these times.

Many also neglected to track how long claims sat in limbo, leaving some cases to stagnate for months or even years.

Longo said "and importantly" it was a large increase in complaints lodged with the Australian Financial Complaints Authority (AFCA) that led to a review in the first place.

"All this points to the cold hard truth that super trustees have to get a grip on their data, systems, and processes. They have to know what's going on in their own business," he said.

"That is why ASIC has been calling on the sector to improve, following an ongoing thread of governance failures. And why we warmly welcome the government's proposed mandatory and enforceable service standards to drive improvement in trustee conduct."

He said that's also why the next phase of ASIC's work on the superannuation sector is to focus on how trustees learn from and respond to the complaints they receive.

"Why? Because no business can thrive without understanding the people it serves," he said.

"Again and again, we return to the same theme: customer-centric or member-centric can't be lip service. It has to be lived, day in, day out. And customer-centric means complaint-aware."