APRA seeks to clarify trustee SOA oversight concerns

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).

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“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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Yes minister.

In other breaking news, the PBS has announced doctors will be forced to hand over patients private medical files to pharmaceutical companies. These companies can also employ their own doctors to step in and write scripts. These operations are funded by a surcharge on the costs of all medicines, despite most patients not using the service. The AMA has said nothing about it, and the mainstream media haven't bothered to mention it.
See how dumb this looks when you put it in context of another profession. APRA need to be held accountable for their reprehensible, regulatory overreach.

It seems to me legislation or guidance these days is thrown out as a thought bubble for its victims to decipher. If they get it wrong, the regulators come down hard with hindsight tips aplenty. I get tired of repeating the old mantra: where is the FPA and AFA in all this?

The AFA have been very clear on their strong opposition to super trustees reviewing SoAs:
https://www.moneymanagement.com.au/news/financial-planning/afa-hits-back...

I was not aware of that, I retract my inclusion of the AFA and stick to the FPA only in my comment.

Sooo what you're trying to say, very badly, is an SMSF can only pay fees out of the SMSF coffers for advice that relates to the SMSF? Then why don't you educate trustees on that, and remind them, and then leave it up to the trustees, their accountants and their auditors to check on that like they do now? The level of fees would be minimal in relation to everything else, so I'd like to see the science behind this problem in the first place. Why not focus on the bigger issues? i.e. Stop overreaching your jurisdiction for such a simple matter.
Your thoughts Phil Anderson?

APRA is generally quite a sensible regulator. ASIC on the other hand is a rogue regulator, heavily influenced by the biased, unaccountable, extremists in its ranks. I suspect this "joint" regulatory guidance about advice fees from super was drafted by ASIC, and APRA was cajoled into putting their name to it. APRA is now backpedalling fast after realising the absolute idiocy of it.

I think every SOA should be reviewed by the regulator (APRA). But first the staff reviewing the SOA need to be ALL fully accredited financial advisers and pass all regulatory requirements. This would guarantee high quality reviews by qualified staff and also solve future advice underemployment problems. Also the Government can pay for the work rather than the clients...

"In our engagements with trustees we have made it clear that their role is not to obtain or second guess each piece of advice...Citing an SOA is only one way of assisting in this respect,”

Can you imagine....
Hi Mr & Mrs smith its your Adviser here. Can you come in on Tues the 21st for our meeting to go through my Statement of Advice?
Great, you are free. Just wait a second while I make a call to see if your super trustee is free for the meeting too. They will decide if my advice is any good and whether I should be paid.

ASIC & APRA should just take over ALL Advice.
NO existing Advisers are good enough or trust worthy enough to provide Advice.
No existing Advisers can honestly provide compliant advice with the total BS over kill of Regs and Regulators.
And ASIC can provide the Advice in an Affordable manner.
Ms Press, you are up first, lets see your Advice to a real client. And the time costs involved. Can't wait to review it.
Australia is run by the most out of control Canberra bubble bureaucratic morons on the planet.

The circus continues. Regulation over regulation. What a joke

The whole fee consent and now Trustee oversight rules are being designed by morons who continue to quote Hayne as responible for this.
Hayne simply recommended that Clients should understand their fees and Product Providers should confirm that those clients are aware those fees are being deducted via their accounts.
The rubbish we have ended up with is lawyer upon lawyer adding new rules with no concept of what is already in place.
Time to push back from all sources, advisers, licensees, professional bodies and product providers - lets stop accomodating this rubbish

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