Fund Regulatory Update

ACCC looks at super merger reforms, Aon & WTW in sights

The Australian Competition ad Consumer Commission (ACCC) has indicated that merger reforms will be on the agenda this year, with multiple superannuation mergers on its radar. With so many smaller funds being absorbed into larger funds to benefit from economies of scale, competition is thus slowly eroded. The ACCC can prevent mergers in the superannuation sector, despite the fact that other regulators have urged mergers so members don’t miss out on super savings.

The ACCC has flagged Aon’s proposed merger with Willis Towers Watson, two of the three largest providers of commercial risk, reinsurance and employee benefits broking and advisory services in the world, and in Australia. The merger, says the ACCC, may lead to price increases or reduced service levels for complex or high-value commercial insurance customers.

Gov: Advisers now need written consent for fee deductions, ERFs must be reunited in 28 days

After reforms were passed by the government, financial advisers must now have prior written consent each year to deduct fees from accounts, while funds from Eligible Rollover Funds must be given to members within 28 days. Deductions are not allowed for ongoing advice fees on MySuper products. The new legislation is part of Hayne Royal Commission reforms.