Financial planning advice over super fund switching has been riddled with incorrect conduct and disclosure falling short of the compliance requirements, according to surveillance by the Australian Securities and Investments Commission (ASIC).

But in a fiery response, Financial Planning Association (FPA) CEO Kerrie Kelly has criticised ASIC's methodology, and accused the regulator of misrepresenting the situation.

“The findings highlighted some areas where licensees and advisers needed to lift their game,” ASIC’s Acting Chairman Jeremy Cooper said.

Surveillance of 260 pieces of advice from financial advisers included numerous failures to disclose costs, as well as instances of financial planners putting their interests before those of clients.

Mr Cooper says most advisers recommending a switch made “limited or no investigation” of their clients’ “from” fund, while others failed to tell their clients about losses of benefits arising from a switch, or charges associated with the new fund.

The surveillance also showed a tendency for advisers to recommend funds related to their licensees, which ASIC says poses a potential conflict of interest.

But “since December 2004 much work has been done by the FPA to ensure some guidance was available for its members in the absence of guidelines from ASIC,” Ms Kelly said.

She says the sample of financial advice used by ASIC does not “represent the overall standard of compliance”.

“This clearly makes the report an examination of some examples of unacceptable practices prior to ASIC’s guidelines… but it is not an examination of industry standards.”

But ASIC says the survey was intended to “test the readiness of advisers to give complying super switching advice ahead of the implementation of super choice”.

Yesterday Ms Kelly challenged ASIC to take action beyond “just issuing a report”.