Under the Future of Financial Advice (FOFA) provisions, a conflict arises when a corporate super specialist undertakes a superannuation fund selection tender and then provides ongoing services that are paid for by the super fund, according to CSSA.
CSSA president Douglas Latto said although it is essential to ensure the specialist is not “inappropriately influenced” in the tender process when they are also providing the ongoing service, finding a new way to be remunerated is “proving very difficult”.
Mr Latto said corporate super specialists may be forced to abandon corporate super fund clients or exit the industry, which he said would have a devastating effect on small to medium businesses.
“If no regulatory solution to the remuneration issue is found quickly, these services may disappear altogether on 1 July 2013,” Mr Latto said.
“This would leave a large gap in the market with no obvious alternative.”
