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
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
