ACTU submission lambasts planners

The Australian Council of Trade Unions (ACTU) has used its submission to the Parliamentary Inquiry into structure and operation of the superannuation industry to argue that while many Australians may need financial advice at some time they do not need permanent, ongoing advice.

The ACTU submission said Australians should be able to have confidence that when seeking advice from an adviser, the adviser would act solely in their interests and not provide advice on the commission they could earn by recommending a particular product.

“Currently the vast majority of financial advisers do not recommend the best performing superannuation funds to their clients,” it said.

“Further, most people visiting a planner are not aware that, in effect, they are being sold a product rather than given advice that is in their best interests.”

The ACTU submission referred to the findings of the recent Australian Securities and Investments Commission’s shadow shopping exercise and claimed it had revealed that conflicts of interest were rife in the financial planning industry.

“The reality is that financial planners are often conflicted when providing advice to clients because of the structure of the industry,” the submission said.

“Commissions are primarily a distribution tool for major financial institutions and remuneration method for financial advisers,” it said.