Financial advice amendments sought for MySuper
Financial advisers are at the core of many corporate superannuation funds and the market stands to be distorted by the rules around MySuper, according to the Corporate Superannuation Specialists Association.
In a submission filed with the Parliamentary Joint Committee reviewing the MySuper legislation, the CSSA revealed research confirming that almost all employers involved in corporate superannuation funds (96.8 per cent) say their fund utilises the services of a financial adviser(s) to provide services to their corporate super fund.
As well, the research provided by CSSA said that more than half of corporate superannuation fund members (52.4 per cent) have used the services of a financial adviser associated with their corporate super fund. Of those who had not, almost 73.9 per cent had expressed at least some interest in utilising adviser services.
The CSSA submission also pointed out that 71.1 per cent of employer respondents had said the financial advice services offered were either "very" or "extremely" valuable for members.
However, it warned that more than two-fifths of those who had used the services of a corporate super adviser had said they would not be likely to use a financial adviser if the service was not provided through their superannuation fund.
"This suggests that a large proportion of members would be left without access to professional financial advice if the service was taken away," it said.
In submissions on both the Government's MySuper and Future of Financial Advice changes, the CSSA has argued that the removal of commission from MySuper products, and the inability of corporate superannuation specialists to charge a plan-based fee for services they provide, would lead to them to have to withdraw their services from workplaces, "as there is no way for them to continue to be paid for their services".
"This will result in the removal of any proactive financial education from workplaces and runs contrary to the Federal Government's stated goal of improving access to financial advice (and therefore of improving financial literacy)," the submission said.
The CSSA has suggested the MySuper legislation be amended to allow an explicit fee within a MySuper fund to enable the ongoing provision of education and services to members of the fund.
It said this fee could be negotiated at a workplace level to reflect the needs of the workplace, and education specific to the requirements of a particular workplace could then continue to be delivered proactively.
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