COVID-19 inquiries prompt new calls for intra-fund advice extension

With superannuation funds struggling to deliver information to their members on a range of issues from investment switching to insurance coverage, calls are emerging for a post-COVID-19 review of the interaction between general, intra-fund and personal advice. 

The chief executive of electricity industry super fund EISS Super, Alex Hutchison said the past several days had reinforced the degree to which the regulatory constraints entailed in the difference between general, intra-fund and personal advice, made it difficult to give members the information they badly needed. 

“When you’ve got record levels of member inquiries dealing with complex issues, then the shortcomings of the current regime become obvious and arguably need to be re-examined when the current crisis is over,” he said. 

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Hutchison said the answer might be to consider extending the scope of intra-fund advice. 

Hutchison reported that EISS Super had recorded a 100% increase in call volumes with members raising a number of issues from whether they were eligible to participate in the Government’s hardship early access regime to whether they had appropriate insurance coverage. 

The experience of EISS Super was consistent with that of other funds including the largest industry superannuation fund, AustralianSuper which reported high volumes of traffic to its call centres and longer than usual wait times. 

Like other funds, AustralianSuper has created a web page dedicated to answering questions relating to the COVID-19 pandemic including reassurance that are covered with respect to the virus, but not in income protection terms where job loss occurs. 

“…income protection covers total or partial disablement only. Insurance against loss of income from business closure or lack of shifts cannot be provided by super funds,” the AustralianSuper web page said. 

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More reason to totally ditch the current Treasury Draft bills relating to all advisers & super funds.

Not really, this guy is just looking to hold on to his little job and appear to be relevant. See the name of the super fund he works at. His fund of $7B (there are investment products bigger than that) should have been merged into one of the others a long time ago and he would be gone. No we are not expanding intra-fund advice for you mate so you won't get to keep sitting in your little castle for much longer.

NO, what the last few days should be telling us is that the red tape we have across the industry needs to be shredded and a level playing field installed. Clients need help regardless of how they source this help and in a fast, efficient manner.

#Intrafundadviceiscorrupt - when those who are entitled to it and have already paid for it over many many years and cannot receive when they need it most.

Fee for no service on a pandemic scale.

I'm sorry, are they finding it hard to do their job, are they potentially breaching the law to help clients.
the very laws they had been lobbying for to remove advisers as competition to providing advice.

So questions relating to eligibility for early release and appropriate levels and types of insurance cover is personal advice.
You cant have it both ways Industry have to go through the same ridiculous duplication of advice documentation and compliance that advisers have to go through.
So, now you might understand the restrictive nature of what currently exists and even more restrictive conditions yet to apply.
The current regulatory framework is unworkable and is killing the advice process.

I don't see where the issue lies - they are not providing financial product advice if they give a member the eligibility criteria for any of the government benefits. Even the early release from super, they'd only be telling people how to determine if they're eligible and directing them to their MyGov account. None of that is General or Personal advice, it's factual only and doesn't fit in advice regime.

I think the issue is much more likely that they don't have enough qualified staff or the IT capabilities to service the huge number of members they have.

I get the feeling that these people are looking for personal advice though. They want someone to guide them through as to what they should do personally.... could be wrong, but just the feeling I get.

Of course they are looking for personal advice. In the case of intra fund advice the super fund employee does have access to the client's individual super account details right there in front of them. The client could therefore reasonably perceive the advice given to them is actually personal advice tailored to their circumstances. If the client could reasonably perceive it that way, I believe the legal position is that it's personal advice by definition, regardless of any "general advice" warning given. As such it can only be given by a licensed adviser with full FSG & SoA disclosures. Have the union funds been systematically committing hundreds of thousands of breaches, similar to CBA and Westpac with their AML breaches?

Hard to believe they haven't which I guess is why ASIC never investigates.

Any conversation about money is personal from the consumers perspective.

The trustees' challenged in service delivery only highlight their inadequate staffing. If super trustees aren't adequately resourced maybe the review should focus on potential breaches of their legal obligations rather than extending the range of strategies and services they can provide.

But do we really want another tier of people who can call themselves a financial planner, probably with reduced education and compliance requirements giving advice on the same basis as a Fasea approved and qualified Financial Planner does?
What could possibly go wrong?

So, the funds that have removed servicing advisers from the Workplace Super sector for the past 6 years are now complaining because they cant service their members adequately because really they are just product providers who have never really valued advice?? Hmm....

Have a think about this....(in future)
A MySuper client calls their adviser in the last 2 weeks very concerned in relation to market volatility and their asset allocation and requests advice in relation to this matter in addition to analysing their insurance type,levels of cover and require a change in beneficiaries but want to understand the potential impact of doing so.
The clients account has decreased in value and they are looking likely to lose their employment and income.
The adviser confirms to the client they are unable to pay for the advice received from their superannuation account and must pay for the advice from their rapidly dwindling bank account needed to pay for food, mortgage, fuel, power, children, insurances etc etc etc.
The client needs efficient, accurate advice in a timely manner so they can clearly understand their options in relation to their position.
The client has $250,000 in their MySuper account and it is being proposed they are unable to elect to pay their adviser from those invested monies when the advice is in direct relation to that fund.
The client then must forgo funds earmarked for other essential needs to pay their adviser.
Is this in the client's best interest ?
Is this of benefit to the client ?
Is this a " Kenneth Hayne" example of a MySuper client never needing advice in relation to their investments and insurance ?
This is how the real world works Kenneth.....not your world...the real world.
The ridiculous proposal of not allowing advice fees (either one-off or ongoing) to be a choice provided to a client of a MySuper account is effectively discriminatory.
This is disadvantaging these clients and super members.
This is telling them that as they are in a MySuper account they cannot elect to pay an advice fee in the same manner as other superannuation members may be able to and they will have to use after tax income to access advice.
How on earth is this deemed to be reasonable, fair and in the members best interest ???
Just another example of a complete stuff up.

Yes. An excellent case study to recommend why it is in their best interest to move to a choice fund ASAP.

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