Farrar Demands Higher Standards

Brighter Super chief executive Kate Farrar believes responsible entities (REs) need to be held to higher standards if they want to get involved in superannuation.

Speaking at the Financial Services Council’s Shaping Advice Summit in Sydney, Farrar discussed the impact of the Shield and First Guardian fall-out on the super space and whether members are being adequately protected.

Farrar would make changes for REs if she was Assistant Treasurer Daniel Mulino.

Farrar said, “I think you can do an awful lot within the current regulatory regime. The one piece of regulatory change would be heightened requirements on responsible entities.”

The super CEO – who has been chief executive of the Queensland super fund since April 2018 – had discussed earlier in the panel how she believes REs should be subject to the same regulations as responsible superannuation entities (RSEs).

Farrar noted, “We need targeted regulatory change that actually targets the source of harm. Looking at the differences in obligations between REs and RSEs, it’s pretty stark that REs lack those same level of requirements in terms of consumer protection and the same oversight as RSEs.”

She added, “My own personal view is that if REs want to participate in our world-renowned superannuation system, it makes sense they would have the same level of obligations and some tightening-up needs to be done.

APRA’s super data transformation work and the additional understanding that has come from that is very welcome but there’s a fair way to go and some the obligations need to be a little bit more descriptive.

Farrar also shed light on the fund’s advice policy and how it is encouraging members to take up financial advice before making decisions about their superannuation.

Current offerings include a super health check, personal advice about a member’s Brighter Super account, a retirement health check, personalised retirement advice and Brighter Super Advice Plus.

Farrar said, “Our aspiration is to provide some type of advice to every member before their retirement, it’s an absolutely big goal. But part of that is how you think about the definition of advice and we consider it all the way through from education, engagement, general advice to super-in-retirement advice,”

The expectation is that every member will take it up if it is appropriate for them but that doesn’t always mean they will.

For now, Farrar and Brighter Super are focused on providing high-quality advice and services to their members, and advocating for regulatory changes that will benefit the industry as a whole.