Financial advisers, master trusts and even employers will need to ensure they do not expose themselves to accusations of mis-selling in the new choice of funds environment, according to specialist superannuation lawyer, Michael Hallinan.
Hallinan, from legal firm Peter Townsend Business Lawyers, has told a Sydney business briefing that the nature of the regulations surrounding choice of fund mean that there is potential for financial advisers and others to be exposed to accusations of mis-selling.
He says that this may be particularly the case in circumstances where an adviser suggests to a client that they change superannuation funds on the basis of fund performance without, at the same time, taking account of factors such as insurance coverage.
“People will need to be careful to look beyond simple fund performance and at the non-obvious elements such as insurance,” Hallinan says.
He says that employers will also need to be careful about the manner in which they handle the nomination of the default superannuation funds under the new choice regime.
Hallinan says that while Section 32ZA of the new legislation attempts to deal with the issue, there may be scope for this to be challenged in circumstances where the fund’s performance is woeful or where there may be significant mis-administration or embezzlement.
