Superannuation fund trustees have been quizzed by the Australian Securities and Investments Commission (ASIC) about how they are funding their intra-fund advice offerings.
In particular, the regulator has asked the superannuation funds how they have been determining the cost of intra-fund advice and how much of the cost is being bundled into the administration fee and collectively charged across the membership base.
ASIC has also sought to determine whether superannuation funds have been seeking to deliver transition-to-retirement advice under the auspices of intra-fund advice.
The ASIC approach has been revealed by ASIC commissioner, Greg Tanzer, who confirmed that the regulator had just completed a surveillance exercise which covered the delivery of intra-fund advice by superannuation funds by internally and by third-party suppliers.
He outlined the questions being asked of superannuation funds on intra-fund advice as being:
- who provides it and the type of advice given;
- what steps trustees take to ensure that the services are not used excessively by some members, to the detriment of others;
- how trustees determine how much of the cost is bundled into the administration fee and collectively charged across the membership base; and
- if a trustee provides intra-fund advice, what topics are most commonly covered (e.g. advice about insurance or advice about switching to a different option in the fund) and whether the trustee offers transition to retirement advice under the intra-fund advice framework.
ASIC is expected to publish the results of its surveillance activity around intra-fund advice before the end of the year.
