FPA points to hypocrisy on superannuation funds and fees
The Financial Planning Association (FPA) has reinforced its belief that superannuation funds should not be able to obscure the cost of scaled financial advice within administration fees.
In a submission to the Parliamentary Joint Committee (PJC) reviewing the Government's Stronger Super legislation, the FPA has argued that all forms of personal financial advice should be subject to the same set of rules, "irrespective of the provider or subject matter."
The submission said the FPA believed a workable scalable advice framework was critical to enabling greater access to affordable financial advice for more Australians, with intra-fund advice being a subset of scalable advice.
"However, it is critical that the FOFA reforms such as the best interest duty and specific related remuneration provisions allow for scalable advice and are not undermined by the Stronger Superannuation reforms," it said.
"MySuper members should be permitted to access information (including general advice) about their superannuation interest as part of the administration fee, but not access personal financial advice which is paid for by all members."
The submission said that while the FPA completely supports the facilitation of factual information and general financial advice services to superannuation fund members, it does not agree with the provision and payment of 'personal' intra-fund advice services being bundled with an administration fee.
"The FPA has a number of concerns with this, not least the hypocrisy that underlines this position, especially in the context of the catalyst for the reform agenda underway as part of the Future of Financial Advice (FOFA) reforms," it said.
"Hidden fees, commission, lack of transparency and paying for services not received are all problems FOFA is trying to rectify in respect to the provision of financial advice.
Therefore, based on these objectives, how does hiding the fees associated with the provision of personal advice services such as intra-fund advice within the 'administration fee' serve to be in the interests of the superannuation fund members?" the submission said.
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