The Institute of Public Accountants (IPA) and the SMSF Professionals’ Association (SPAA) have announced a partnership with the former warning of challenges to the superannuation system while the Financial Services Council welcomes three new directors and ASIC throws out Flowers.
Windfall mindset must change: IPA
The unfettered use of superannuation on retirement is a threat to the ongoing viability of the superannuation system, according to the Institute of Public Accountants (IPA). Many retirees take their benefit as a lump sum and use these funds fully before transferring to a government pension, which IPA chief executive, Andrew Conway, believes undermines the public policy rationale of superannuation.
“The integrity of the Australian superannuation system can only be maintained if incentives to draw superannuation benefits as a lump sum are reduced, and incentives to adopt annuities and other pension products as the preferred retirement incomes are encouraged,” he said. “We believe that MySuper default account holders to be particularly vulnerable, as many spend lump sums quickly to pay out existing debts, take holidays and buy new assets.”
Conway added that clients should be advised to treat superannuation upon retirement as a long-term financial stream, not a sudden windfall gain. In related news, the IPA and the SMSF Professionals’ Association (SPAA) have reached agreement to work together in areas such as accreditation, advocacy, research and policy development, organisational efficiencies, and education.
FSC welcomes new directors
The Financial Services Council has appointed three new directors to its board: Andrew Hagger, group executive of NAB Wealth and chief executive of MLC; Geoff Lloyd, chief executive and managing director of Perpetual; and David Bryant, chief executive and chief investment officer of Australian Unity Investments. Peter Maher, chairman of the Financial Services Council (FSC) said he was delighted that Geoff Lloyd – who was a director from 2008 to 2010 – had rejoined the board.
“These three directors have accepted appointments to the FSC board at a time of significant transformation for financial services in Australia − an industry which is now well positioned to become Australia’s next major area of growth,” he said. Maher also thanked four outgoing directors for their service to the FSC board.
“Steve Tucker, Pauline Blight-Johnson, Joyce Phillips and Gerard Doherty have voluntarily dedicated their time and expertise to achieving excellence and effective governance of financial services in Australia,” he said.
ASIC cancels Flowers Financial Management licence
The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services licence of Sydney-based company, Flowers Financial Management, which sold its financial services business in November 2011. On January 15, 2013 Hall Chadwick was appointed liquidators of the company. Section 915B(3)(b) of the Corporations Act 2001 allows ASIC to suspend or cancel an AFS licence held by a body corporate if the body, among other things, becomes an externally administered body corporate.
