AUSTRALIA - Shadow minister for superannuation Senator Nick Sherry (pictured) has blasted a new report by the Australian Securities and Investments Commission (ASIC) for being "anti-competitive".
ASIC’s super switching surveillance report sought to test the readiness of advisers to give complying super switching advice, ahead of the implementation of super choice last month.
The review looked at recommendations to switch superannuation funds from a diverse range of advisers, including advice to move into self managed superannuation funds.
However, Sherry, the Labor Senator for Tasmania, said that the report was “disappointing” and he argued that “commission driven selling” was a central problem in the provision of independent superannuation advice.
Sherry blasted: “How can advice be truly independent when some planners are paid by some providers with a commission income stream in many cases for 10 or 20 years or longer? This is a major flaw in the super choice model.
“Given ASIC's conclusion that there is a strong tendency to recommend a client switch to a superannuation fund related to the licensee’, commission based selling is a central flaw that needs correction.
“Amazingly the word ‘commission’ is not mentioned in this report. Surprisingly ASIC could not find any!”
In the report, the ASIC found that there was a strong tendency to recommend a client switch to a superannuation fund related to the licensee.
The body said this created the potential for conflicts of interest that “need to be carefully managed to avoid the risk of inappropriate advice”.
“The findings highlighted some areas where licensees and advisers needed to lift their game. In particular, we identified some instances of misconduct during the surveillance, some of which has already led to enforcement action”, said acting ASIC chairman Jeremy Cooper.
“But ASIC is confident that the platform for super choice is now in place.”
But in response, Sherry added: “ASIC contradicts its major finding with the claim ‘it is confident that the platform for super choice is now in place’.
“‘Light on’ is Labor's description of detailed analysis and information of this or other issues in the ASIC report. The report is disappointing in its lack of hard data and detailed information. This should be released.”
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