Savvy planners prompt AAL revisions
A number of industry superannuation funds have reviewed their automatic acceptance limits (AALs) on insurance in the knowledge that they have been ‘gamed' by some financial advisers to assist their clients.
Industry superannuation fund executives have told a roundtable to be published this month in Money Management's sister publication, Super Review, that they had reviewed the design of their superannuation offerings because of the manner in which AALs were impacting their claims profiles.
Australian Institute of Superannuation Trustees (AIST) chief executive, Tom Garcia said during the roundtable, held during last month's Conference of Major Superannuation Funds (CMSF) that he believed that the high level of AALs had played into the hands of financial planning firms.
"There are financial planning businesses that have worked it out and have strategies to have a little bit of [client] money in those funds, just to gain access," he said.
Garcia told the roundtable that he believed it was sometimes good to put changes in policy to financial planners "because they will find the best things, the best outcome".
Equipsuper chief executive, Danielle Press had earlier told the roundtable that while funds came under a lot of pressure with respect to AALs, it was important to understand their impact on the overall claims profile and therefore premiums.
The roundtable concluded that superannuation funds needed to pay much closer attention to the design of their insurance offerings, particularly with respect to total and permanent disablement (TPD).
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