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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: Super regulator gets powers to 'weed out duds'

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Super regulator gets powers to 'weed out duds'

Australian Financial Review Apr 4, 2019 6.16pm

Joanna Mather

 

Major public sector superannuation funds in NSW and Victoria announced plans to merge to create the nation's second largest fund after AustralianSuper, as federal Parliament cleared new laws giving the prudential regulator greater power to force exits and tie-ups.

First State Super, which has $91 billion in funds under management, and VicSuper, with $22 billion, have signed a memorandum of understanding to explore the benefits of a potential merger.

First State Super chief executive Deanne Stewart said initial discussions indicated a strong cultural alignment between the funds.

“We both have a member-first culture and a heritage in the public sector," she said. "Many of our members work in education, community services and health and we’re both seeing strong private-sector growth."

The announcement coincided with passage of legislation giving the Australian Prudential Regulation Authority a long-sought "directions power", along with the capacity to seek civil penalties against super fund directors who breach their duty to act in the best interests of members.

APRA deputy chairman Helen Rowell said the regulator would be better able to press for improved member outcomes and deal with underperformance at an early stage.

“Previously, APRA could only direct a superannuation trustee after a contravention of the law had taken place, or where APRA believed there was an urgent, material threat to members’ interests," she said.

"The new directions power gives APRA the ability to intervene at an early stage before members suffer significant harm."

Ms Rowell said in some circumstances acting in the best interests of members would require underperforming funds to merge or exit the industry.

“If trustees and trustee directors are not willing or able to meet their best interests duties to members, they should be prepared to face serious consequences.”

Also under the new laws, trustees will have to conduct an annual outcomes assessment against a series of benchmarks. Failing funds may have their MySuper authorisation revoked.

A merger between First State and VicSuper would create a fund managing $110 billion in retirement savings for over 1.1 million members. A recommendation to the boards of each fund is anticipated around mid-2019.

Chant West senior investment research manager Mano Mohankumar said the combined entity would be the second-largest fund behind AustralianSuper, which has $145 billion.

Lobby groups for both industry and retail funds welcomed passage of the legislation giving APRA greater powers.

“Coupled with tougher civil and criminal penalties for superannuation trustees who breach their fiduciary duties, these new laws should raise the performance bar,” Industry Super Australia deputy chief executive Matthew Linden said.

“This sets out the regulatory framework that will pave the way to weed out dud, underperforming super funds and products – giving consumers confidence their savings are being invested in better performing products.”

The bill also bans what Commissioner Kenneth Hayne described as the "treating of employers".

Financial Services Council chief executive Sally Loane said the changes were long overdue.

“Practices like offering inducements to employers have no place in a modern superannuation system, and we are pleased to see the strengthening of the existing prohibition as recommended by the royal commission into financial services," she said.

“The FSC also supports APRA having additional powers to ensure poorly performing funds do the right thing and either lift their game or merge with a better-performing fund."

 

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