Commissioner Kenneth Hayne took a hard-line against hawking superannuation products and the practices of "treating" employers in his final Royal Commission report.
Hayne wants the hawking or unsolicited offer of superannuation products to be prohibited, which he believes is in no way appropriate or in the interests of consumers.
The law should be amended to make it clear that contact with a person during which one kind of product is offered is unsolicited unless the person "attended the meeting, made or received the telephone call, or initiated the [inquiry]."
He pointed to the attempts made by ANZ and CBA to sell superannuation in bank branches under a general advice scenario - which "may have contravened the law."
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He echoed the Productivity Commission's recommendation that an employee should be defaulted to one superannuation account over their working life and as they move from job to job.
This is to curb the proliferation of unnecessary default accounts, he said.
Hayne wants more stringent provisions around the fact that funds compete to be nominated as default funds.
Some large funds spend significant amounts to maintain or establish good relationships with those who will be responsible for nominating the default fund for their employees by way of entertainment and sporting events, he said.
Section 68A of the SIS Act provides that a trustee of an RSE or an associate of a trustee must not supply or offer to supply goods or services to a person on the condition that one or more of the employees of the person will be, or will apply or agree to be, members of the fund.
However, Hayne said Section 68A does not go far enough in preventing "treating" employers and called for the Act to be amended to include a civil penalty provision in the event of a breach - which is to be enforceable by ASIC.
Stop deducting advice fees from MySuper accounts
Hayne recommends the cessation of advice fees and other intra-fund advice fees deducted from MySuper accounts - which is what the law already requires.
"Given the limited nature of the advice that may be paid for from a superannuation account, it might be thought that there are few circumstances in which paying fees for ongoing advice of that kind would be in the best interests of a member," he said.
The nature of the advice paid for with respect to a superannuation account is limited to advice about particular actual or intended superannuation investments such as consolidating accounts, selecting funds or products, or asset allocations. This does not include broad advice on how the member might best provide for their retirement or maximise their wealth generally.
"Any practice by trustees of allowing fees for these latter kinds of financial advice to be deducted from superannuation accounts must end," he said.
Retail funds to stay
Hayne said he does not support the banning of retail funds as it would have "several effects."
Firstly, it would eliminate one set of existing participants and reduce competition, he said.
"Secondly, it would insulate existing not-for-profit participants from whatever competitive pressures are exerted by the threat of large for-profit entities entering this part of the financial services market and providing some new and better offering to consumers."
Hayne said he is "not persuaded that a case has been made for imposing some form of structural separation on RSEs."
Structural separation would also be a large step to take, as it would affect every person who is currently a member of any one of a significant number of funds.
"Apart from the members holding MySuper accounts with the relevant entities, all of those members would have chosen the fund in question. If, for any reason, those members consider it would be in their interests to move funds, they can do so," he said.
Regardless of how super funds nominate or select directors, Hayne's main recommendation is that all directors must meet the best interests obligation.
"All directors of the trustee of an RSE owe the same duties, including, to perform their duties and exercise their powers as directors of the trustee in the best interests of the beneficiaries: the members."
Hayne said rules prescribing board numbers or composition "distract attention" from the basic requirement of ensuring that the board is - at all times - skilled and efficient.
He doesn't think matters about board composition and appointment should be dealt with by legislative change.
"All the matters I have mentioned concern the proper governance of the fund. Proper governance is, in my view, a matter for the prudential regulator APRA to supervise," he said.