Financial planning networks are unlikely to recommend investing with industry superannuation funds, despite calls from the regulator for them to do just that.

The latest Australian Securities and Investments Commission (ASIC) “shadow shopping” survey shows that up to 19% of advisers are offering unreasonable or suspect advice to clients when it comes to choosing the best super fund.

ASIC Chairman Jeffrey Lucy said the unreasonable advice is often the result of conflict of interest, particularly where funds offer different remuneration for advisers.

Industry funds, which usually don’t pay commissions, are often seen as the biggest victims. They offer comparatively low fees and above-average returns but are rarely recommended by the big financial planning networks.

In a discussion paper released late last month, ASIC says such conflict of interest creates a dilemma for individual advisers and their clients, as the remuneration model favours commission-paying products.

But Colonial First State, which has more than 600 advisers across Australia, says it leaves industry funds off its recommendation list for an unrelated reason.

CEO John Pearce says industry funds, like Colonial First State itself, are “asset allocators” and do very little managing of funds themselves. He says it doesn’t make sense for his advisers to recommend an entity offering the same service as Colonial First State.