Australia's securities watchdog raised fresh concerns over retirement savings advice on Thursday, finding that more than a fourth of cases reviewed showed advisers giving recommendations that could seriously harm people's nest eggs.
The Australian Securities and Investments Commission said 27 out of 100 cases of advice given to Australians to establish self-managed superannuation funds posed "serious harm" to retirement savings. About 62% failed to meet legal duties to act in clients' best interests, the review found.
Self-managed super funds, or SMSF, which accounted for about a quarter of the A$4.3 trillion ($2.79 trillion) superannuation sector in Australia, are a type of retirement saving fund where participants manage it themselves instead of a big fund run by an industry group or a bank.
Only 38 of 100 advice files showed that advisers gave recommendations to clients in their best interests.
The review highlights increased scrutiny over the fund management sector after the collapse of certain funds, including Macquarie's (MQG.AX) Shield Master Fund in 2024 and First Guardian Master Fund earlier this year.
"People often set up an SMSF because they think it will give them more control over their retirement savings, but they aren't suitable for everyone," said ASIC Commissioner Alan Kirkland.
"Financial advisers who recommend that clients establish SMSFs without properly considering whether it is suitable for their objectives, financial situation, and needs, are not helping them take control of their future, they are placing it at risk."
Separately, H.E.S.T. Australia, the trustee of HESTA super fund, paid an A$37,560 penalty over infringement notices issued by ASIC due to misleading advertisements about its commitment to remove carbon emissions.
The ASIC also received an A$18,780 fine from superannuation fund Prime Super due to infringement notices alleging it made misleading claims about its tobacco investments.
($1 = 1.5389 Australian dollars)
