Be careful what you switch for: FPA
Switching for switching’s sake in the new choice of funds environment has been discouraged by the Financial Planning Association (FPA), which claimed last week that in the majority of cases there is nothing wrong with most peoples’ existing super funds.
The comments came from the chair of the FPA’s superannuation committee, Louise Biti, who also predicted that few people would change funds when choice was introduced.
Nevertheless, Biti expressed fear that because of recent media attention surrounding the issue, some members would almost feel obligated to change funds as soon as choice was introduced and could end up losing insurance cover or incurring higher fees.
Biti, whose comments come amidst intense scrutiny by the Australian Securities and Investments Commission of advisers who recommend clients switch funds, said consumers should not base important decisions on what they were told in commercials or “conversations at work around the water cooler”.
“It is only if they have researched the various options thoroughly and found that their fund does not compare well with other funds that are available, or does not meet their specific needs, that change should be considered,” she said.
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