Advice regarding superannuation consolidation will no longer be classified as intra-fund advice, under new arrangements announced by Minister Bill Shorten last week.
The Minister for Financial Services and Superannuation issued a statement on Thursday 8 December outlining the requirements that will apply to the delivery of intra-fund advice.
Under the new regulations, intra-fund advice will still cover any general advice or personal advice that is provided within the sole-purpose test. However, new exclusions have been introduced, specifically:
- Advice relating to whether the member should consolidate their existing superannuation accounts
- Advice to switch the member away from the superannuation fund to another superannuation fund (except to the extent the advice relates to moving a member from an accumulation product into a retirement product offered by the same entity)
- Advice that contains recommendations in relation to financial products that the member holds outside of superannuation
- Advice in relation to investment choice outside of the trustee-prescribed investment options
“The delivery of scaled advice is critical to achieving the Government’s objectives of promoting greater access to financial advice. This Government is committed to providing advisers with certainty of how to provide this form of advice in a way that meets their regulatory obligations,” Mr Shorten said.
Minister Shorten also confirmed that intra-fund advice will be subject to key FoFA regulatory requirements, including the Best Interests duty, a move that was welcomed by the Financial Planning Association.
Dante De Gori, FPA General Manager, Policy & Government Relations, said: “The FPA feels that the clarification that this announcement has provided on what constitutes intra-fund advice was essential. This is a positive step toward creating best practice financial advice.”
“These new regulations still allow superannuation funds to charge indiscriminately and invisibly for their intra-fund advice,” Mr De Gori said. “The FPA believes that any fees for intra-fund advice must be transparent to fund members. As long as the Government allows intra-fund advisors to avoid disclosing fees, inequities will remain within the financial planning industry and those most affected will of course be the clients.”
