Advice conflicts must be disclosed

financial-planning/advice/superannuation/conflicts-of-interest/mercer/

6 October 2015
| By Mike |
image
image
expand image

Any financial advice provided to superannuation fund members needs to be honest and objective with conflicts of interest disclosed, according to a new report prepared for the Chartered Financial Analysts (CFA) Institute by Mercer.

The report, which calls for the governance of pension plans to be independent from the Government and any employer control, also makes clear that while financial advice is important to overall outcomes for superannuation fund members, transparency sits at the heart of overall outcomes.

The report also strongly endorses the use of lifetime contribution caps as a means of helping superannuation fund members, including women with broken work patterns, to play catch-up.

"Community confidence in the pension system will be enhanced if the accrued benefits of members are protected from the financial consequences of fraud, significant mismanagement or employer insolvency," the report said but noted that such protection should not extend to market movements that affect the value of the member's benefit.

"Pension plans should also provide members with information and assistance about their personal situation," it said. "This can be through a range of approaches including web-based calculators with live data feeds, a call centre for advice, seminars and the provision of personal financial advice."

"Any financial advice provided by pension schemes, financial institutions or financial advisors must have a high level of integrity and professionalism," the report said. "The Statement of Investor Rights, prepared by the CFA Institute, contains several principles that are also applicable for pension scheme members. These include honesty, objective advice, fair treatment, the disclosure of conflicts of interest, clear communication as well as confidentiality."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

4 months 1 week ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

4 months 2 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

6 months 2 weeks ago

Commonwealth Bank has formally dropped to zero advisers following LGT Crestone’s acquisition of its advice arm – some six years on from the Hayne royal commission. ...

1 week 4 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 days 13 hours ago

ASIC has banned a former NSW adviser from providing advice for 10 years for investing at least $14.8 million into a cryptocurrency-based scam. ...

4 days 17 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
3