Report not harsh enough on switching: Labor

The Federal Opposition has criticised the corporate regulator for not going far enough in what is already being perceived by the financial planning industry as too harsh an assessment of advisers’ ability to fairly switch their client’s superannuation funds.

Responding to the Australian Securities and Investments Commission’s (ASIC) super switching report, Labor’s spokesman on financial services and superannuation Senator Nick Sherry said driven selling in the provision of independent superannuation advice represents “a central flaw in the super choice model and needs to be corrected”.

Released earlier this month, the report found 90 per cent of 4,900 super switching recommendations examined by ASIC late last year advised a move to a fund run by a party related to the adviser.

Describing commission selling as representing “anti-competitive behaviour” by advisers, Sherry said those advisers who engaged in it were in a “fundamental conflict of interest”.

“How can advice be truly independent when some planners are paid by some providers with a commission income stream in many cases for 10 or 20 years or longer?,” he said.

Sherry also slammed the report as “months overdue, and released only after super choice has commenced, and disappointing in the lack of hard data and detailed information released”.

“Amazingly the word ‘commission’ is not mentioned in this report,” he said.

He added that ASIC “contradicts its major finding in the report with its conclusion that it is confident the platform for super choice is now in place”.