Trailing commissions still living within super
The financial planning industry may be trying to move beyond commissions-based remuneration, but they will continue to be a factor for superannuation funds under new reporting standards being put in place by the Australian Prudential Regulation Authority (APRA).
APRA is seeking to put in place reporting standards for superannuation funds consistent with the requirements of the Australian Bureau of Statistics and its new paperwork specifically makes allowance for trailing commissions paid to third parties such as financial advisers.
The existence of the reporting standard for trailing and other commissions to planners is made clear in a response to APRA from the Association of Superannuation Funds of Australia (ASFA) which also points to other types of "advice expenses".
The ASFA submission notes that, "a number of funds have a facility which allows payment of ongoing adviser service fees directly to advisers from members' accounts.
It said these types of "advice expenses" were separate from "administration and operating expenses" and asked for APRA to confirm precisely how they should be dealt with for reporting purposes.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
