The Australian Securities and Investments Commission (ASIC) has confirmed that superannuation fund switching sat at the heart of review of financial advice provided by large financial institutions.
The regulator said it had tested the quality of personal advice being provided and that it had specifically looked at customer files where advisers had recommended an in-house superannuation platform to new customers, to test whether advisers had complied with the best interests duty and related obligations when providing the advice.
It said a common theme it had seen across the non-compliant advice was the unnecessary replacement of financial products, where advisers recommended that a customer switch to a new product when their existing product appeared to be suitable to meet the customer’s needs and objectives.
Detailing its methodology, ASIC said it had chosen to review advice on superannuation platforms because customers commonly receive advice on superannuation platforms.
“For each of the five advice licensees selected for this aspect of the project, we selected the in-house superannuation platform with the largest amount of funds received from new customers in the first relevant period,” it said.
ASIC said the in-house superannuation platforms chosen for each advice licensee were generally similar in features and fees and costs. However, the insurance offered within the platform did vary across the platforms.
