Intra-fund advice rules approved
The Financial Planning Association has expressed deep disappointment and concern at guidance and class order relief sanctioned by the Federal Government that will allow superannuation fund trustees to provide simple superannuation advice outside the constructs which apply to financial planners.
The Government has avoided any debate in the parliament on the issue, enabling the Australian Securities and Investments Commission (ASIC) to introduce the changes via a class order under the existing regulatory structures.
Announcing the move, the Minister for Financial Services, Chris Bowen, said it represented a significant benefit for superannuation members who had not been able to get answers to basic questions about their retirement savings without having to pay for unnecessarily expensive advice while retaining adequate consumer protections.
FPA chief executive Jo-Anne Bloch told Money Management that given the concerns that had been raised by the financial planning industry, she was disappointed by the package announced by the Government.
Detailing the changes, Bowen’s office said a superannuation fund could only provide members with personal advice under the ASIC guidance and relief package if the superannuation fund held an Australian Financial Services Licence (AFSL) to provide personal advice.
If a superannuation fund uses the guidance and relief to provide a member with intra-fund advice, the superannuation fund must notify the member that they are relying on the relief to provide intra-fund advice and advise the member that the advice is limited in scope.
In short, the fund needs to explain why it is only considering the member's existing interests in the superannuation fund at the time of providing the advice.
Where personal advice results in any increased fees, costs or charges, insurance premiums, or remuneration (including commissions), the member must be notified in writing in dollar amounts.
AUTHOR
Mike Taylor
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
