SUPERANNUATION – AUSTRALIA

Change agent’s mission to restore trust in AMP

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Original article by James Eyers, Jessica Gardner
The Australian Financial Review – Page: 19 & 22 : 23-Aug-18

AMP’s incoming CEO Francesco De Ferrari will receive a base salary of $2.2m when he takes up the role in December, while his remuneration package also includes incentive payments. He faces a major challenge in turning around AMP’s fortunes in the wake of the banking royal commission’s revelations. De Ferrari is currently the head of Credit Suisse’s private bank in Singapore, and AMP chairman David Murray has praised the corporate culture at Credit Suisse. Shares in AMP closed $0.06 lower at $3.39 on 22 August, after the stock began trading ex-dividend.

CORPORATES
AMP LIMITED – ASX AMP, CREDIT SUISSE AG, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CREDIT SUISSE (AUSTRALIA) LIMITED, MORGAN STANLEY AUSTRALIA LIMITED, BT FINANCIAL GROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG

NAB charges double on super

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Original article by Elizabeth Redman
The Australian – Page: 17 & 20 : 20-Aug-18

The banking royal commission has spent the last two weeks grilling the superannuation sector over its fees and practices. Companies under the commission’s microscope have included National Australia Bank, with Australian Securities & Investments Commission deputy chairman Peter Kels stating that it planned to submit a brief to the Director of Public Prosecutions in regard to NAB’s "fee for no service" scandal. Meanwhile, it has been revealed that NAB unit MLC charges members of at least 10 super funds up to double the fees that are imposed by the fund’s external managers.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, MLC LIMITED, THE VANGUARD GROUP INCORPORATED, MACQUARIE GROUP LIMITED – ASX MQG, PERPETUAL LIMITED – ASX PPT, PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

NAB’s fee strategy in spotlight

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Original article by Joanna Mather
The Australian Financial Review – Page: 8 : 7-Aug-18

The banking royal commission has been told that National Australia Bank retained "grandfathered" commissions after merging five separate superannuation funds in 2016. A former NAB executive, Paul Carter, told the inquiry that the bank had been concerned about the impact that abolishing the commissions would have on revenue, as financial planners could potentially have responded to the move by directing clients to other products. The inquiry was also told that NAB failed to inform clients that they could opt out of paying a "plan service fee".

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC LIMITED, MLC MASTERKEY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NULIS

Super funds face heat over other expenses

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Original article by Joanna Mather
The Australian Financial Review – Page: 1 & 4 : 25-Jul-18

The classification of superannuation funds’ expenses in the category of "other" has come under scrutiny in a background paper issued by the banking royal commission. About 20 per cent of industry super funds’ expenses are categorised as "other", compared with around 10 per cent of retail funds’ expenses. The background paper also notes that many people who switch super funds in search of lower fees and higher returns often end up with higher fees and lower returns. Superannuation will be a focus of the inquiry’s next round of public hearings, which begin on 6 August.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIA. PRODUCTIVITY COMMISSION, RICE WARNER ACTUARIES PTY LTD

Hayne to probe industry super funds over union sponsorships

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Original article by Michael Roddan
The Australian – Page: 17 & 21 : 20-Jul-18

The superannuation industry will be a key focus of the banking royal commission’s next round of hearings, which will commence on 6 August. AustralianSuper, Hostplus and Cbus are believed to be among the industry super funds that have been asked to provide the inquiry with information on their sponsorship arrangements with unions. However, the inquiry is not believed to have requested similar information regarding such deals with employers’ groups.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIANSUPER PTY LTD, HOST-PLUS, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED, AMP LIMITED – ASX AMP, WESTPAC BANKING CORPORATION – ASX WBC, THE NEW DAILY, INDUSTRY SUPER HOLDINGS PTY LTD, ME BANK, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, MASTER BUILDERS AUSTRALIA INCORPORATED, ACTU, CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION OF AUSTRALIA

Super funds notch ninth year of growth

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Original article by Joanna Mather
The Australian Financial Review – Page: 18 : 19-Jul-18

Data from Chant West shows that Australia’s median growth superannuation fund achieved a return of 9.2 per cent in 2017-18. Mano Mohankumar of Chant West says growth funds have achieved positive returns for nine consecutive years, with an average annual return of nine per cent over the period. Hostplus delivered the best return for the financial year, at 12.5 per cent, ahead of AustSafe Super and Statewide Super. Unisuper was the top performer over 10 years, with an average annual return of 7.6 per cent.

CORPORATES
CHANT WEST HOLDINGS LIMITED – ASX CWL, HOST-PLUS, AUSTSAFE PTY LTD, STATEWIDE SUPERANNUATION PTY LTD, UNISUPER LIMITED, AUSTRALIANSUPER PTY LTD, SUNSUPER PTY LTD, SUPERRATINGS PTY LTD

Perpetual motion: Lloyd to lead NAB wealth spin-off

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Original article by Cliona O’Dowd
The Australian – Page: 17 & 21 : 18-Jul-18

National Australia Bank has advised that Geoff Lloyd will become CEO of its MLC wealth business on 1 September. Lloyd recently stepped down as CEO of Perpetual after six years, a period which saw strong growth in its profits and share price. NAB plans to divest MLC via a sharemarket float or trade sale, and Lloyd says the opportunity to grow the business as a stand-alone wealth manager was a key reason for his decision to take on the role. The spin-off will include NAB’s superannuation and financial planning businesses.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC LIMITED, PERPETUAL LIMITED – ASX PPT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, IOOF HOLDINGS LIMITED – ASX IFL, JBWERE LIMITED, NABTRADE, AMP LIMITED – ASX AMP, LEND LEASE GROUP LIMITED – ASX LLC, NIPPON LIFE INSURANCE COMPANY LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Funds in black for ninth year in a row

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Original article by Cliona O’Dowd
The Australian – Page: 21 : 17-Jul-18

Preliminary data shows that Australia’s median growth superannuation fund achieved a return of nine per cent in 2017-18, compared with the S&P/ASX 200’s gain of 8.3 per cent. Data from Chant West shows that the median growth fund’s return since fiscal 2009 has averaged 9.5 per cent, for a cumulative return over the period of more than 130 per cent. The funds with the highest returns are expected to have gained at least 12 per cent in 2017-18. Meanwhile, MLC Super’s chief investment officer Jonathan Armitage says returns are likely to be lower in the next several years.

CORPORATES
CHANT WEST HOLDINGS LIMITED – ASX CWL, MLC LIMITED, AUSTRALIANSUPER PTY LTD, HOST-PLUS, REST SUPER PTY LTD, STANDARD AND POOR’S ASX 200 INDEX

Westpac to quit SMSF lending

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Original article by Duncan Hughes, Joanna Mather
The Australian Financial Review – Page: 6 : 17-Jul-18

Westpac will cease offering new loans to self-managed superannuation funds that wish to invest in property at the end of July. Chris Balalovski of BDO notes that there does not seem to be any problems with losses in the SMSF sector as regards property, and that Westpac’s decision could be more to do with negative regulatory or consumer sentiment towards loans to SMSFs. Jordan George from the SMSF Association says it is his understanding that the Commonwealth Bank and Macquarie still provide loans to SMSFs, but that the National Australia Bank and the ANZ Bank do not lend to the sector.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BDO AUSTRALIA LIMITED, SMSF ASSOCIATION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MACQUARIE GROUP LIMITED – ASX MQG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED

Sunsuper swallows another fund

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Original article by Joanna Mather
The Australian Financial Review – Page: 16 : 6-Jul-18

Sunsuper will merge with AustSafe Super, a $2.2 billion industry super fund that targets regional and rural Australians. The merger will create a $58 billion fund with 1.4 million members. The Australian Prudential Regulation Authority is keen to see smaller superannuation funds merge, while Sunsuper CEO Scott Hartley believes that the sector will consolidate to the point where only half a dozen "mega" funds remain.

CORPORATES
SUNSUPER PTY LTD, AUSTSAFE PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, KINETIC SUPER, AUSTRALIA. PRODUCTIVITY COMMISSION, CHANT WEST FINANCIAL SERVICES PTY LTD