$500 ceiling for financial advice

Members of industry superannuation funds have exhibited strong reluctance towards paying more than $500 for financial advice.

The Conference of Major Superannuation Funds in Brisbane has been told that a survey of fund members had revealed the level at which fee resistance cuts in.

The executive manager of member advice at industry fund HESTA, Debbie Blakey, said the $500 figure had shown up in a survey conducted by the Industry Super Network, which included HESTA members.

She said the survey had shown there was a significant reduction in demand for advice once the price exceeded $500 and that this was probably owed to the perception that commissions-based advice was free.

Blakey said it was for this reason HESTA had sought to reinforce with members that there was no such thing as free advice.

She said that while HESTA had been providing limited advice under an Australian Financial Services Licence since 2006, it had moved to an intra-fund advice model under the relief provided by RG200.

Blakey said this had resulted in a reduction in the Statement of Advice (SOA) from 24 to six pages and just one hour for a written SOA. She said that while the fund had opted to work with the intra-fund advice relief, it was also providing limited retirement advice for a fixed fee under the HESTA AFSL.

Blakey said that while full fee-for-service advice was available to members, it was sought by only a limited number of members.

"Intra-fund advice is a basic service and I don't see how funds cannot do it," she said.