Planner’s actions no excuse for super fund member’s insurance lapse
The fact that a financial planner filled in a superannuation fund application form and associated insurance documentation on behalf of a client did not absolve the client of responsibility when he lost insurance cover, according to a determination by the Superannuation Complaints Tribunal (SCT).
Dealing with a complaint which could have implications for the Government’s changes to insurance inside superannuation, the Tribunal noted that the superannuation fund member had suffered an injury but because he had not maintained fund contributions he had no total and permanent disability (TPD) cover.
On the question of the role financial planner, the SCT determination noted that the complainant had conceded he had signed an application form for superannuation fund membership “but contends the financial planner filled out the forms on his behalf and failed to give him the opportunity to complete the forms in his own time”.
“If indeed this did occur, then it is a matter that the complainant should raise with the financial planner,” the determination said.
The SCT had been told that the complainant had joined the superannuation fund in February, 2003 but that the superannuation fund received the last superannuation guarantee contribution from the employer in April, 2004 with the fund writing to the complainant in March, 2014 to inform him the balance of his account was insufficient to pay insurance charges.
It was told that a further letter was sent to the complainant in April, 2014 informing him of insufficient funds and then again in May that year telling him his insurance cover had been cancelled.
The SCT was told that the complainant suffered an injury rendering him unable to work in June, 2014.
The Government had moved to make insurance inside superannuation opt-in for members aged under 25 or with account balances below $6,000.
Recommended for you
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.
