Consumer test drive confirms limits of intra-fund advice
Choice-related group, Super Consumers Australia (SCA) has pointed to the limitations of intra-fund advice noting that “any advice from the same company providing the product isn’t independent”.
The SCA analysis has emerged as part of a so-called “road test” of advice provided by superannuation funds involving the experience of five staff-members of consumer group, Choice.
The results of the “road test’ appeared to be mixed for those participating with the commentary suggesting that in a number of instances the intra-fund advice provided by fund advisers fell short of what the clients were looking for.
As a result of the exercise, SCA policy manager, Franco Morelli said people interested in getting advice from their fund needed to be aware of its strengths and weaknesses.
However, he pointed out that a “weakness” of intra-fund advice was that it could not make comparisons with other funds and their products.
“People looking for this information should be aware that they need to look elsewhere, like the government’s free fund comparison tool,” Morelli said.
“This advice also isn’t designed to offer you comprehensive advice which is tailored to you and takes into account a complete view of your finances, circumstances and retirement goals.
“Finally, be aware of the conflicts built into this type of advice. Any advice from the same company providing the product isn’t independent. A fund will have the incentive to get you to stay, or contribute more to their product.”
Sound like a good 4 point warning that should be mandatory to be verbally given pre Intra Fund Sales Advice.
And then same warning written at front of any Intra Fund sales document.
Too sensible for Govt to implement though :-/
Along with the cost of providing the advice.
it basically is under the scope of advice in the SOA.
No SOA on any intra fund advice I’ve ever received — which is 3
Gee who would have thought it – a bit of truth telling at Choice/SCA
Those industry fund call centres perform the same function as the “policy preservation” call-centres at the life offices
Or, following the FSC’s recent announcement about a code of conduct to apply to the payment of claims by trustees of industry superfunds, maybe someone may have read the fasea code and noted the contents of standard three
Just saying!