One major industry fund does charge for intrafund advice

intrafund advice superannuation industry super unisuper

7 October 2020
| By Mike |
image
image
expand image

At least one major industry superannuation fund has been directly charging members for the provision of intrafund advice.

Amid complaints from some financial advisers about the nature of intrafund advice and how it is funded by superannuation funds, UniSuper has told a key Parliamentary Committee that it actually charged members a fee, although the fee might not cover the actual cost.

“… our members are charged a fee for the delivery of intrafund advice services,” the fund has told the House of Representatives Standing Committee on Economics.

“While there is no legal obligation to charge members for intrafund advice, we believe it is important that those who receive the service pay for the advice they receive. There is no legal requirement for these charges to cover the cost in part or in full of delivering these services and the service is paid for through a combination of explicit personal charges as well as collective charging,” it said.

The fund revealed that it had 12 advisers specifically allocated to the provision of intrafund advice and that the revenue generated by them from that activity in 2019/20 was $808,272.

UniSuper also revealed that like all companies providing financial advice it was confronted by the need to hold professional indemnity (PI) insurance but that this was wrapped up in the cost of its broad range of insurances.

“Our financial lines’ insurance policies include a combined policy for Directors’ and Officers’ Liability, Professional Indemnity (PI) and Financial Institutions’ Crime Insurance,” it said.

“Cover for our financial planning activities is embedded within the PI component of cover. Over the years, we have sought advice from an insurance broker to split the premium across items covered. We have been told splitting is highly subjective and that it would be highly unlikely to obtain standalone PI cover for financial advisers for less than what we pay for the combined policy,” UniSuper said.

“We have not disclosed the premium for the policy on the basis that we are required to keep this information confidential.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

54 minutes 9 seconds ago

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 5 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 3 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 6 hours ago