The Australian Securities and Investments Commission (ASIC) has confirmed that the Royal Commission got it wrong on the status of intra-fund advice.
Appearing before the Parliamentary Joint Committee on Corporations and Financial Services, ASIC representatives confirmed that intra-fund advice has to be regarded as delivering personal advice.
ASIC executives confirmed the status of intra-fund advice under questioning from NSW Liberal Senator, Andrew Bragg.
Discussing the issue later with Money Management, Bragg said his questioning had been aimed at whether ASIC agreed with the Royal Commission’s statements on intra fund advice and the therefore the rationale for policy recommendations.
“I am particularly conscious we do not want to see the emergence of regulatory arbitrage,” he said. “As a hypothetical, I wouldn’t want to see a widening of personal intra-fund advice if we are going to restrict the availability of other forms of fee for service advice.
Bragg said he believed that regulatory arbitrage never worked for consumers.
“In this policy space, we ant more Australians to seek high quality, non-conflicted advice,” he said.
Bragg agreed that ASIC appeared to have confirmed that the Royal Commission’s position that intra fund advice was not personal advice was inaccurate.
The question about the Royal Commissioner, Kenneth Hayne’s interpretation of the status of intra fund advice has been a bone of contention since the Royal Commission’s final report was issued earlier this year.
The Financial Planning Association (FPA) amongst others took issue with Hayne’s statement that intra-fund advice did not represent personal advice.
The FPA noted that Hayne’s position was at odds with Government legislation and ASIC’s stated position that intra-fund advice was personal advice that took into consideration the individual’s circumstances as they related to the member’s interest in the superannuation fund.