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FSC analyses super, advice developments

The Financial Services Council (FSC) has examined the government's legislative agenda for super and given a policy update on the Quality of Advice Review.

Firstly, following assistant treasurer and minister for financial services Stephen Jones' announcement of a Treasury review of the Your Future, Your Super laws, the FSC expects findings to form a significant component of super policy agenda over the next six months.

Further, the FSC said: "It's expected that the review will allow for consultation of an initial issues paper as well as consultation on any draft laws that aim to alter the scope and operation of the Your Future, Your Super laws."

"We can also expect the government to move quickly on its pre-election commitment of legislating an objective of superannuation."

While details for this project haven't been announced, the FSC envisages the eventual legislative definition of super will be to provide an income in retirement. Consequently, the FSC continued that if legislation is worded this way, expect policy settings to take this objective into account.

According to the FSC, the final forecasted priority of the government's super agenda is to establish an all-of-government framework for facilitating partnerships between super funds and projects of national importance.

Nationally important projects could include large-scale infrastructure, affordable housing, innovative investment and agriculture and manufacturing, the FSC proposed.

As previously reported by Financial Standard, some funds like the Australian Retirement Trust have already taken the initiative to partner with state governments, possibly indicative of future collaborative investment opportunities between parties.

The FSC commented: "Co-investment with state and local governments will be encouraged. We can expect work to develop this framework to kick off later this year."

"By the very nature of the policy, the framework's development will likely be an ongoing, iterative process involving a large degree of consultation with superannuation funds."

Super aside, FSC chief executive Blake Briggs said the peak body had also been focused on the ongoing Quality of Advice Review.

In a statement, the FSC statement said that across all publicly released submissions, there is strong alignment between what submitters asked for and the FSC's proposed personal framework. Chiefly, advocating for the abolition of the safe harbour, clear definitions of advice and information, and simplified requirements.

According to the FSC, areas of alignment included the review of the advice process through the lens of the consumer, removal of the safe harbour steps with greater clarity around how the Best Interest Duty is met and a review of key terms of advice (personal advice and general advice).

Moreover, the retention of the Life Insurance Framework, retention of the Australian Financial Services Licence and support for principles-based regulation were also other areas of alignment.

Meanwhile, the FSC took aim at greenwashing, stating that greater consistent and accuracy was needed to deter the deceptive practice's promotion.

Although ASIC has undertaken a thematic review into greenwashing, looking at the disclosures of selected managed and super funds, the FSC said it will continue to engage with the regulator on achieving greater consistency and accuracy in fund labelling.

This month, the FSC will release guidance on climate risk disclosure, including direction for funds making net zero commitments, reporting climate risk and applying climate-related sustainability labels.

Read more: FSCQuality of Advice ReviewSuperannuationFinancial Services CouncilAustralian Financial ServicesAustralian Retirement TrustBest Interest DutyBlake BriggsFinancial StandardStephen JonesTreasury