(Reuters) -Australia's securities watchdog on Thursday raised fresh concerns over retirement savings advice, finding that over a quarter 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 advisers gave recommendations to clients in their best interests.
"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."
Retirement funds have been under scrutiny from regulators in recent times after the collapse of Macquarie's Shield Master Fund in 2024, which impacted thousands of customers who invested their retirement savings.
($1 = 1.5389 Australian dollars)
(Reporting by John Biju in Bengaluru; Editing by Alan Barona)
