Introducing compulsory opt-in requirements for financial advice while also requiring a collective fee to be paid by superannuation fund members for personal advice creates a double standard, according to the Corporate Super Specialist Alliance (CSSA).
The Government intends to make it possible for superannuation fund members to access personal financial advice through a collective fee by introducing a compulsory intra-fund advice fee into both MySuper and other corporate super funds. It will also require other advice clients to have to opt-in every two years, said CSSA president Douglas Latto.
"This is possibly the most patent demonstration of double standards we have seen to date in the FOFA debate," Latto said.
"Personal financial advice is exactly that, highly personal. Why should all members of a super fund subsidise the personal financial plans of a few?"
A current class order relief allowed super funds to advise on simple matters such as contributions and insurance within super, but industry funds want to expand that under scaled advice provisions to include things like transition to retirement and Centrelink advice, which completely flies in the face of the opt-in argument, Latto said.
A collective fee would not be tailored to the needs of individual employers and employees but would be determined by fund trustees at a standard level for all members, Latto said.
"The Government, in its paternalistic fashion, has again decided what is good for you: in their view, one size fits all," he said.
Latto said those seeking personal advice should pay for that advice individually.
"It is hard to see a better world for super fund members in any proposal that has them subsidising the personal financial plans of others and which legitimises the Government’s double standards and conflicted principles," he said.
