There has been strong reaction, both positive and negative, to last week’s announcement by the Federal Government that will allow superannuation fund trustees to provide limited, single issue, personal advice to superannuation fund members.<\/p>\n
Introduced by ASIC\u00a0through a conditional \u00a0‘class order relief’ from\u00a0requirements under the Corporations Act, licensed super fund trustees may now provide factual information and personal advice to their members about their existing interest in a superannuation fund on\u00a0issues which include:<\/p>\n
According to ASIC Chairman, Tony D’Aloisio<\/strong>, the aim of providing this\u00a0relief is “…to clarify existing law and increase super fund members’ access to advice about their existing interest in a super fund.”<\/p>\n Reaction to this move by\u00a0various groups within\u00a0the financial services industry\u00a0has\u00a0been determined according to the interests of the members they represent:<\/p>\n FPA<\/strong>\u00a0<\/p>\n The Financial Planning Association (FPA)\u00a0has strongly condemned ASIC’s class order relief.\u00a0 CEO, Jo-Anne Bloch<\/strong>, said this plan threatens to put the superannuation savings of millions of Australians at risk:<\/p>\n “There are 16,000 financial planners who are ready, willing and able to provide low cost advice to super fund members, yet the Minister for Financial Services, Superannuation and Corporations Law and Minister for Finance and Deregulation have chosen to support a free kick to Trustees who are not well equipped to deliver individual financial advice to superannuation members,” said Ms Bloch.<\/p>\n The FPA adds that its members will campaign actively against this initiative.<\/p>\n AFA<\/strong><\/p>\n The Association of Financial Advisers has voiced equally strong condemnation over the class order relief, suggesting it ‘ marks a return to the Dark Ages for advice.’<\/p>\n Referring to the Corporations Act requirement to know your client, know your product and provide appropriate advice,” AFA CEO, Richard Klipin<\/strong>, said:<\/p>\n “…it is not financial advice when the trustee does not have to know the member, does not have to understand the member’s needs and objectives, does not have to provide advice which takes into account the member’s entire financial situation, does not have to complete a risk profile on the member and when all the trustee has to offer in terms of investment is its own superannuation fund.”<\/p>\n In attempting to democratize access to advice, Mr Klipin believes ASIC and the Government will ultimately achieve the exact opposite. \u00a0He suggests that under this initiative, advice on the majority of superannuation investments will come mainly from superannuation trustees who have a vested interest:<\/p>\n “Policy driven by ideology usually ends in tears, with significant unintended consequences,” concluded Mr Klipin.<\/p>\n The strong language used by both the FPA and AFA in responding to the class order relief highlights the seriousness of the issue from their stand-point, but\u00a0on the other side of the coin….<\/p>\n ASFA<\/strong><\/p>\n The Association of Superannuation Funds of Australia (ASFA) has welcomed the class order relief as ‘a victory for common sense’.<\/p>\n ASFA believes members of superannuation funds will be the winners from this initiative, with ASFA CEO, Pauline Vamos<\/strong>, stating:<\/p>\n “The important benefit to the average fund member is that their fund will be better able to answer direct questions on single issues, such as their level of insurance, their investment choice, or perhaps whether they should access the government’s co-contribution.\u00a0 It will help drive members to make the most of their super,” said Ms Vamos, who added:<\/p>\n “This is not about competing with financial planners – it is about providing assistance to the average fund member who does not have the money to go to a financial planner.”<\/p>\n “Financial planners who act in the best interests of members and are able to provide advice without the need to sell a product will continue to have a key role to play in the provision of in-product advice,” said Ms Vamos.<\/p>\n IFSA<\/strong><\/p>\n Representing financial institutions, The Investment and Financial Services Association (IFSA) has welcomed\u00a0the class order relief, saying it has been ‘…unnecessarily expensive to obtain basic financial advice’ since the introduction of the Financial Services reform package.<\/p>\n But IFSA also\u00a0believes this move\u00a0does not go far enough.<\/p>\n Outgoing CEO, Richard Gilbert<\/strong>, said “The relief is limited to intra fund superannuation investments and does not apply outside superannuation where there is also significant need to make financial advice more accessible.<\/p>\n “IFSA has long called for amendments to the law to remove existing uncertainties around personal advice and to facilitate the provision of limited advice,” said Mr Gilbert, who concluded:<\/p>\n “Our industry is willing to continue to work with Government and the regulator to truly enable the provision of limited advice for consumers and for further measures that address the broader need for financial advice within our community.”<\/p>\n The Federal Government, ASIC, ASFA and IFSA all support the class order relief because each sees a benefit to the ordinary superannuation member, while the adviser representative bodies, FPA and AFA hold the totally opposite view, namely that ordinary superannuation fund members will ultimately suffer as a result of being given access to limited, single issue, personal advice.<\/p>\n riskinfo will monitor and report developments, but in the mean time, take the opportunity to make your voice heard in our comments section below…<\/p>\n","protected":false},"excerpt":{"rendered":" There has been strong reaction, both positive and negative, to last week’s announcement by the Federal Government that will allow superannuation fund trustees to provide limited, single issue, personal advice to superannuation fund members.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-2138","post","type-post","status-publish","format-standard","category-compliance-regulation"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/2138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=2138"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/2138\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=2138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=2138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=2138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}…this plan threatens to put the superannuation savings of millions of Australians at risk<\/h6>\n
…advice on the majority of superannuation investments will come mainly from superannuation trustees who have a vested interest<\/h6>\n
This is not about competing with financial planners…<\/h6>\n
IFSA\u00a0… believes this move\u00a0does not go far enough<\/h6>\n