The chief executive of Australia’s largest superannuation fund, Australian Super, has questioned the degree to which industry funds who use independent financial advisers (IFAs) will be held responsible for the quality of their advice.
Speaking at the Association of Superannuation Funds of Australia national conference in Melbourne, Ian Silk acknowledged the number of IFAs utilised by his fund to deliver advice to members but said the regulatory environment was changing and giving rise to concerns about to what extent a superannuation fund would be held responsible for the quality of the advice.
He said the issue arose because of the manner in which the advice fee was deducted from a member’s Australian Super account.
Silk exampled circumstances where a complaint might be lodged about the quality of advice provided by an IFA utilised by Australian Super.
He said it was something which had not been considered when the fund first ventured into such arrangements with IFAs
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
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