The Australian Securities and Investments Commission (ASIC) released their report on financial advice related to the superannuation industry and found that, generally, advice has been ‘appropriate’.
According to the statement from the corporate regulator, they surveyed 25 superfunds to consider the overall quality of the financial advice.
“Superannuation funds have a very important role to play in meeting the financial advice needs of members wanting to build their retirement income. It was pleasing to see that the personal advice reviewed was generally appropriate for members,” ASIC Commissioner Danielle Press said, in an official statement at the time of the report’s release.
Press highlighted that where ASIC did see some ‘risk of detriment’, it would be followed up with the provider. She also noted that retail superfunds and industry funds were equal in terms of the quality of advice, based on their sample of 25.
The report found that 49 per cent of files demonstrated full compliance with best interest duty and related obligations, while 36 per cent did not demonstrate full compliance in any of these areas.
15 per cent did not comply, and there was evidence that affected members were at risk of non-financial detriment.
Reasons for non-compliance, as given in the report:
the advice provider failed to identify the subject matter of the advice and the member’s objectives, financial situation and needs; and
the advice provider failed to conduct a reasonable investigation into financial products and base all judgements on the member’s relevant circumstances.