Corporate superannuation advisers forgotten by FOFA
The FOFA intra-fund fee needs to be transparent and allow corporate superannuation advisers to charge for the services they offer under MySuper legislation, according to Corporate Superannuation Specialist Alliance (CSSA) president Douglas Latto.
Latto said the intra-fund fee, which the legislation requires to be set by a third party, should be negotiated by the company, its super members and the advisers who deliver the service.
He also said MySuper legislation as it is currently drafted did not allow customisation of services at the workplace level, or take into account the number of employees that fall under the fund and their different needs.
Latto said FOFA's intra-fund fee is unlikely to sufficiently adress the services provided by corporate super advisers.
"The MySuper legislation, as proposed, does not allow tailoring at the workplace level. It has a 'one-size-fits-all' approach with the inability to customise benefits, such as insurance cover, or charge different fees for each workplace.
"In addition, the setting of this standard fee is by the trustee through the intra-fund advice fee, and does not involve the employer, employee or the adviser," he said.
Latto said there was a misconception about the type of business being run, which could be better termed services than advice.
He said possible solutions could include a transparent intra-fund fee negotiated at workplace level, or an admission that what CSSA provides is services and therefore it does not fall under FOFA.
"We believe we may not be able to be rewarded fairly for the services that we're offering, and in a MySuper fund it will be one fee right across the whole MySuper fund," Latto said.
AUTHOR
Staff Writer
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
