Fiona Reynolds: The intrafund advice laws are changing to take into consideration Centrelink. With a lot of not-for-profit funds, most members are just going to retire with a small amount, and they’re going to be getting their aged pension, and that was a real gap, I think, that you couldn’t talk to people about the relationship between Centrelink and what you have in your super and how that was going to work. So I think that’s a significant step in the right direction for lots and lots of workers.

The conversation turned to what the Government might do to encourage more super fund mergers.

Minister Bowen: I think it’s an issue that we have the fourth largest pool of funds under management in the world, and no fund in the top 100. I just don’t think that makes sense. Now, what to do about that is another question. Should the minister be given the power to force amalgamations? No. Should the trustees have a sharper focus in their fiduciary obligations? Arguably. It’s something we’ll look at in terms of Cooper. Are there other things we could do? I know there’s debate about capital gains tax relief, whether that should be extended. Part of me says no it shouldn’t be extended, because if it’s only available for a certain period of time, it’ll concentrate the minds of the trustees to do the consolidation in short order. If they know it’s going to be there forever, they can take their time about it.

Simon Hoyle: Minister, would you mind taking a minute to sum up the government’s vision is for what financial planning should look like after these changes have come into effect ? What will financial planning look like and how will financial planners be required to operate?

Minister Bowen: The two announcements recent announcements were linked in this regard: I don’t think I could have convinced my colleagues, and I don’t think I could convince the Australian people, that putting more money into superannuation is a good thing unless it was much more transparent and professional. And I think the idea of the financial planning industry, as we’ve all said, and I think we’re all on the same page on this – we might have different nuances to the view – but we want it to be professional and trusted, and that means it needs to be not only free of conflicts of interest but be perceived to be free of conflicts of interest. And there’ll be differing views around this table as to the degree of conflicts of interest. And in some respects we’re similar, in this respect. I’ve been in politics in some form or another for 20 years or so. And I have never seen once a political donation to either side of politics having impact on public policy. Never. Never seen it. And I’ve been at relatively senior levels at local, State and Federal, and I’ve seen people of both political persuasions, both close up. That’s not the perception in the community, and as a result, we’re going through a whole process of cleaning up perceptions, political donations, that will end with a much different system of funding politics and political campaigns as we do today. Now, I’ve no doubt that there have been some donations which have swayed public policy, but I’ve never personally seen it, I have to say, close up. And that means that we’ve taken the decision to clean up the perception of politics. Similarly in financial planning, there have been some clear instances of poor advice being given because of clearly conflicted remuneration structures. There’s no question about that. And they have done two things: firstly they’ve caused financial ruination for a not small number of people. Secondly it’s given everybody else a bad name. So how do I see financial planning and the financial advice industry working? It’s quite simple. It works on a basis that the advice is given with no view to the remuneration of the financial planner, and it can’t be perceived to have any view to the remuneration of the financial planner. That might sound like it’s a generality, but it’s what it all boils down to at the end of the day.