The long-awaited Australian Securities and Investments Commission shadow shopping survey into superannuation switching has added fuel to industry superannuation fund concerns about the quality of advice provided by advisers working on commissions.
The survey found that the provision of unreasonable advice with respect to super switching was three to six times more common where an adviser had an actual conflict of interest over remuneration such as commissions.
The survey, which assessed 306 examples of advice given to real consumers between June and December last year, found that where consumers were advised to switch funds, a third of such advice lacked credible reasons and risked leaving consumers worse off.
However the survey did not represent all bad news for the financial planning industry finding that while around 16 per of advice was not reasonable, given a client’s needs the strategic advice provided by advisers was generally helpful to consumers.
According to ASIC, the bottom line is that the survey has found that the financial advice industry still has significant work to do before the quality of advice will be consistently at a level that regulator and consumers will regard as acceptable.
