Phil Anderson (left), Edwina Maloney and Mark Oliver

The extension of the Your Future Your Super performance test to trustee directed products will leave advisers with an increased workload to deal with clients who will now receive failure notices from their super funds.

APRA released the YFYS results on Thursday morning which for the first-time included trustee directed products (TDPs).

There were 96 trustee TDPs that failed to meet the test benchmarks, which included 76 of 305 platform products and 20 of 500 non-platform products.

Financial Advice Association head of policy Phil Anderson says there are implications including capital gains tax events if a client is taken out of a fund or the potential loss of insurance which isn’t taken into consideration by the test.

“Ultimately, it’s the client outcome that’s critical and we don’t want rash decisions being made that could have potential long-term negative consequences for clients,” Anderson tells Professional Planner.

The association has been vocal in the lead up to the results on the implications of the inclusion for choice products for advisers and their clients.

Anderson says the results have the potential to cause alarm for clients, possibly “undermining their confidence” in their adviser.

“It’s acknowledged that the recommendations to go into these products take into account personal circumstances and they may still be absolutely appropriate despite the fact they might have failed test,” Anderson says.

AMP and Insignia own and operate 75 per cent of the failed TDPs – AMP’s NM Superannuation, as well as Insignia’s OnePath and Oasis Fund Management (both acquired from ANZ), and Nulis Nominees (acquired from NAB/MLC Wealth).

Both AMP and Insignia, whose MySuper options passed the test, publicly stated support for the YFYS test but criticised the inclusion of Choice products.