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Industry fund advice ‘reactive’, says CSSA

Intra-fund financial planning services offered by the industry super funds are “reactive” and not in the spirit of raising financial literacy standards, according to the Corporate Super Specialists Alliance.

In an exclusive interview with ifa, CSSA president Douglas Latto, who represents financial advisers specialising in corporate superannuation, said intra-fund advice is predicated on a fundamentally different model to the private sector and IFAs.

“Industry funds give [members] everything [they] technically need, but don’t go out on site of their own volition and sit down with members to give personal advice,” Mr Latto said.

“The whole idea of intra-fund advice within the industry funds is reactive – it’s not proactive – so nobody gets advice unless they initiate a request for a meeting with an intra-fund planner,” he said.

Mr Latto said the MySuper reforms would only further the problem, particularly the prohibition of MySuper funds to pay fees or commissions to external consultants and advisers.

“Under the new rules, if any advice around super is to be given to members at all in the workplace it will need to come out of the employer’s pocket, and many employers will be leaving it to the funds to cover the cost of such services,” he said.

“This just cements the reactive approach which fosters workplaces without advice.”