The Australian Securities and Investments Commission (ASIC) has denied any knowledge of proposals to extend the interpretation of intra-fund advice while acknowledging that it is currently being delivered by way of cross-subsidies within superannuation funds.
Appearing before the Parliamentary Joint Committee on Corporations and Financial Services, the regulator confirmed that the law as it currently stood in terms of the Superannuation Industry (Supervision) Act allowed for the continuation of the cross-subsidy.
ASIC Commissioner, Danielle Press, said that it would be a matter for the Government whether it moved to act on a recommendation from the Royal Commission to remove the cross-subsidy.
“Intrafund advice is personal advice, but it is actually undefined. There is a section of the SIS Act that allows funds to cross-subsidise certain parts of advice,” Press said.
"By law it's personal advice. It takes into consideration your personal circumstances, but it is allowed to be cross subsidised by the SIS Act under 99F,” she said.
However, Press said that at the end of the day the removal of the cross-subsidy was a recommendation of the Commissioner, Kenneth Hayne, and that it was a matter for Government.
Queensland Liberal back-bencher and former financial adviser, Bert van Manen questioned why superannuation fund members who were not receiving advice were effectively paying for the advice delivered to others.
Press responded that that was the law as it currently stood.