Super funds given window to provide limited advice

superannuation-fund/insurance/market-volatility/super-funds/australian-securities-and-investments-commission/ASFA/chief-executive/

11 November 2008
| By Anonymous (not verified) |

The Australian Securities and Investments Commission (ASIC) has provided relief to superannuation fund trustees to provide ‘limited guidance’ to fund members during the current period of market volatility.

ASFA chief executive Pauline Vamos said the relief is “not about recommending a course of action”, but gives superannuation fund trustees the ability to “inform fund members about matters they need to consider”.

This could include the differences in products, the implications of switching portfolios, crystallisation of losses and the potential loss of insurance benefits.

Vamos said the relief provided by ASIC has certain disclosure requirements that must be met by fund trustees.

“This is not about suddenly allowing unlicensed superannuation trustees to provide financial advice or about providing recommendations,” Vamos said.

“It is about being able to provide reasonable assistance to fund members at this time.”

Vamos said the line between “guidance and personal financial advice is a difficult one”, with the relief given by ASIC aiming to address “what often falls within the grey area between general information and personal advice”.

“It is important that fund members can receive some guidance when they ask about switching funds or transferring to a different portfolio or to a potentially lower risk/lower return vehicle,” she said.

Vamos said ASFA sees “implied personal advice as a major stumbling block to the provision of helpful guidance to fund members in the current environment”.

She said the risk of being caught under ‘implied advice’ “has stopped many funds from providing much-needed additional information to members when they call their super fund to switch or redeem an investment”.

The issue is currently being reviewed by the Government’s Financial Services working group.

Superannuation trustees must notify ASIC in writing if they wish to take advantage of the regulator’s ‘no action’ position.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS