Not enough oversight on outsourced intrafund advice

18 April 2013
| By Staff |
image
image
expand image

Superannuation executives have warned super funds to implement more oversight of intra-fund advice and superannuation advice from associated planners to combat risk.

Speaking at an Association of Super Funds of Australia (ASFA) lunch, Superpartners executive general manager for corporate services Lucienne Layton suggested that there needed to be more hands-on monitoring of intrafund advice if super funds outsourced it to planning practices.

"Speaking purely as a risk manager, if I was outsourcing advice, I would want to see a lot more hands on monitoring than I have generally seen across the financial services industry as a professional services consultant," she said.

Super funds faced the risk of not knowing exactly what was going on when intra-fund advice was being provided, and whether that advice given was the right advice and appropriate for a fund's members, Layton said.

Head of risk and compliance at Qantas Super Hugh Loughrey suggested there was structural risks around outsourcing superannuation advice functions.

Conflicts of interest and the provision of best interest duties presented a number of challenges, Loughrey said, while there was also the possibility of reputational risk for the super fund.

"It's a very individual decision for the trustees who have their own circumstances," he said, depending on what level of conflict or control they wanted.

"That might influence the outcome around their attitude towards how do you balance that relationship," he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year ago
Kevin Gorman

Super director remuneration ...

1 year ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year ago

The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation ...

13 hours ago

Super funds had a “tremendous month” in November, according to new data....

4 days 12 hours ago

Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion....

4 days 17 hours ago