More oversight needed on outsourced intrafund advice

Superannuation executives have suggested that super funds must implement more oversight of intra-fund advice and superannuation advice from associated planners to combat risk.

Speaking at an Association of Super Funds of Australia lunch, Superpartners executive general manager for corporate services Lucienne Layton suggested that there needed to be more hands on monitoring of intrafund advice if super funds wanted to outsource it to planning practices.

"Speaking purely as a risk manager, if I was outsourcing advice, I would want to see a lot more hands on monitoring than I have generally seen across the financial services industry as a professional services consultant," she said.

Super funds face the risk of not knowing exactly what was happening when intra-fund advice was being provided and whether the advice given was the right advice for a fund's members, Layton said.

Head of risk and compliance at Qantas Super Hugh Loughrey suggested there was structural risks around outside planners providing superannuation advice.

He saw a lot of challenges around conflicts of interest and the provision of best interest duties, Loughrey said.

There was also reputational risk for the super fund, Loughrey said.

"It's a very individual decision for the trustees who have their own circumstances and what level of conflict or control that they want, and that might influence the outcome around their attitude towards how do you balance that relationship," he said.