ASIC denies knowledge of intra-fund extension



The Australian Securities and Investments Commission (ASIC) has denied any knowledge of proposals to extend the interpretation of intra-fund advice while acknowledging that it is currently being delivered by way of cross-subsidies within superannuation funds.
Appearing before the Parliamentary Joint Committee on Corporations and Financial Services, the regulator confirmed that the law as it currently stood in terms of the Superannuation Industry (Supervision) Act allowed for the continuation of the cross-subsidy.
ASIC Commissioner, Danielle Press, said that it would be a matter for the Government whether it moved to act on a recommendation from the Royal Commission to remove the cross-subsidy.
“Intrafund advice is personal advice, but it is actually undefined. There is a section of the SIS Act that allows funds to cross-subsidise certain parts of advice,” Press said.
"By law it's personal advice. It takes into consideration your personal circumstances, but it is allowed to be cross subsidised by the SIS Act under 99F,” she said.
However, Press said that at the end of the day the removal of the cross-subsidy was a recommendation of the Commissioner, Kenneth Hayne, and that it was a matter for Government.
Queensland Liberal back-bencher and former financial adviser, Bert van Manen questioned why superannuation fund members who were not receiving advice were effectively paying for the advice delivered to others.
Press responded that that was the law as it currently stood.
Recommended for you
ASIC has issued infringement notices to two AFSLs over financial advisers providing personal advice while they were unregistered.
Australian retirees could increase their projected annual incomes by as much as 51 per cent through comprehensive financial advice, according to a Vanguard study, but cost continues to be an issue.
AMP has announced a senior appointment to its North leadership team, reinforcing the firm’s commitment to the advice industry.
Despite the financial adviser exam being rooted in ethics, two professional year advisers believe the lack of support and transparency from the regulator around the exam is unethical.