ASIC green lights super fund financial advice model
Financial planning arrangements between planning groups and superannuation funds underpinned by a written “attestation” as to fees for service have been given the green light by the Australian Securities and Investments Commission (ASIC).
Answering questions on notice from the Joint Parliamentary Committee on Corporations and Financial Services, particularly concerns raised by Queensland Liberal backbencher, Bert Van Manen, ASIC said it had seen one of the attestation documents and believed they were broadly compliant.
Further, ASIC said there were good reasons for superannuation funds to enter into such arrangements.
However, the regulator made clear that much of the onus rested with the licensees providing the service to the superannuation fund.
“Superannuation trustees are not prevented from asking the responsible manager of an AFS licensee to sign an agreement attesting to the provision of advice in return for the advice fees payable to the AFS licensee,” the ASIC answer said.
“AFS licensees should ensure that advice is provided in return for the advice fees they and their representatives are paid. They must behave fairly, honestly and efficiently (see s912A(1)(a) of the Corporations Act 2001) and take reasonable steps to ensure that their representatives comply with the financial services law (see s912A(1)(ca) of the Corporations Act 2001).
“In Regulatory Guide 104 AFS Licensing: Meeting the general obligations (RG 104), ASIC sets out its expectations that AFS licensees monitor and supervise their representatives pursuant to their general obligations. This includes monitoring a representative’s compliance when the representative provides their services (paragraphs RG 104.62 to RG 104.72).
“Further, there are good reasons why a superannuation trustee might seek to ensure the provision of advice services in return for fees deducted from a superannuation account through an attestation from a responsible manager and/or other mechanisms,” it said.
“It is important that superannuation trustees have appropriate oversight of fees and other charges being deducted from members' superannuation accounts for payment to third parties such as financial advisers.”
The answer said that ASIC and APRA were not prescriptive about how a superannuation fund manager should operate but added “we did point out that trustees need to take care to ensure that controls on advice fee deductions do not place undue reliance on assurances or attestations from financial advisers or other third parties, given the potential personal conflict of interest that these parties might have in the continuation of fee payments”.
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