The reforms have now been defeated in the Senate after Senator Rex Patrick’s motion to disallow the regulations succeeded by 29 votes to 25.

CPA Australia general manager of external affairs Dr Jane Rennie said the accounting body had significant concerns about the advice reforms as they didn’t achieve the state purpose of improving transparency.

“Ironically, they could have reduced super funds’ access to material information for investment decisions,” said Ms Rennie.

“The reforms were made without adequate justification, explanation, consultation and consideration. We’re very pleased they’ll be taken [off] the books as a result of the Senate disallowance motion.”

Ms Rennie said that proxy advice is an important service for superannuation funds which ultimately benefits their members, and company shareholders more broadly.

“Proxy advice is part of a bouquet of information that funds take into consideration in their investment decisions. Although these reforms were aimed at proxy advisers, we were concerned that the same arguments could be made to require access to other types of advice provided on a confidential basis to trustees,” she said.

She noted that superannuation funds engage in a variety of activities designed to generate economies of scale, including outsourcing the provision of investment advice to proxy advisers. 

“This is a cost effective way to provide value to members. Making trustees jump through increased compliance hurdles to access advice would not have been in members’ best financial interests,” she stated.

The Australian Council of Superannuation Investors (ACSI) had also previously raised concerns about the reforms, stating that they could have a detrimental impact on the financial outcomes of super fund members.

“The Treasurer’s changes would see superannuation funds that manage money on behalf of millions of members denied independent advice on the performance of the companies they invest in,” said ACSI chief executive Louise Davidson.