APRA seeks to clarify trustee SOA oversight concerns

APRA AIST Suzanne Smith superannuation trustee advice SOA ASIC

21 July 2021
| By Jassmyn |
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The role of a superannuation trustee is not to obtain or second guess each piece of advice given to members, according to the Australian Prudential Regulation Authority (APRA).

Speaking at the Australian Institute of Superannuation Trustees (AIST) Super Financial Advice Symposium, APRA executive general manager, Suzanne Smith said there had been some concerns that rose out of its joint letter with the corporate regulator sent to trustees on oversight of advice fees last month.

Smith said an area of uncertainty that had arisen was the extent to which trustees should be reviewing statements of advice (SOAs).

 

“In our engagements with trustees we have made it clear that their role is not to obtain or second guess each piece of advice. Rather, we think in some instances it is appropriate for trustees to check some services were provided so that the trustee can meet their legal obligation to ensure that only amounts that meet the advice requirements are deducted from member accounts. Citing an SOA is only one way of assisting in this respect,” she said.

“There is no expectation that trustees obtain every copy of SOA produced nor related docs or that individual pieces of advice should be reviewed for quality, value or appropriateness.

 

“Instead it’s open for trustees to come up with an approach that allows the trustees to have necessary comfort that the quality of advice been provided to members is as it should be.”

Smith noted that some trustees undertook periodic assessments or reviews of advisers by using independent parties.

“At its core APRA and ASIA [Australian Securities and Investments Commission] expect trustees in allowing money to flow from super accounts to have sensible controls and processes in place to ensure money is being appropriately dispersed from the fund,” Smith said.

“Expectations that controls and processes exist in relation to payments is not unique to financial advice deductions.

“The most recent communication to industry is aimed at supporting trustees to move forward with confidence and provide clarity on the behaviour and activities to prioritise and importantly those to avoid.”

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