The Financial Planning Association (FPA) has declared its opposition to the Government’s legislative move to stop people from paying for financial advice from their MySuper accounts.
The FPA has told the government it opposed the move which it believed will create two classes of superannuation and take away the ability of consumers to choose where they get their advice and how they pay for it.
In a statement issued today, FPA chief executive, Dante De Gori said that it was incorrect to state that people with a MySuper account were disengaged and therefore did not require advice.
“Many people choose to stay in a MySuper investment option because it is the right one for them and they have the same need for financial advice on their superannuation, insurance needs and retirement planning,” he said.
De Gori said that stopping the payment of advice fees from MySuper investment options would disadvantage many Australians who currently use this arrangement to access affordable advice from their choice of financial planner.
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Yes, but Treasury's Guru of All Financial Planning Wisdom, Commissioner Haynes, said that “It is difficult to imagine circumstances in which a member would require financial advice about their MySuper account”. Hayne Royal Commission Final Report, Vol. 1 (Page 240).
As there is no difference in law regarding providing financial product advice, his comments could be interpreted to suggest that there is no need to charge intra-fund fees to provide for financial advice (from MySuper accounts).
This is a good illustration of just how clueless and incompetent Hayne is in relation to financial services. He was the darling of the media during the RC, thanks to his ability to generate outrage fodder and "gotcha" moments. But this does not qualify him to make sensible recommendations for financial services reform.
In many cases Hayne completely missed the opportunity to make stronger but simpler reforms, that would have made consumers much better off. Yet this example of banning advice fees from MySuper products is unnecessary interference in an area he clearly does not understand. Australian consumers have been very poorly served Hayne's recommendations, and by Frydenberg's slavish commitment to implementing them despite their obvious faults.
you think too highly of lawyers. they are only interested in making money.
the irony is that the most money-hungry and money-focused people who are interested only in money compared to that of all other professions put together are charged with writing the code of ethics for others.
how funny is that.
Frydenberg was running around in circles like an excited puppy following Hayne's recommendations.
Old Uncle Kenneth didn't give Joshie a pat on the day, but the unconditional love that Josh had for Kenneth and his big ideas (that's what they were...just ideas...without substance) just launched Josh into a frenzy of implementation...because Uncle Ken said so.
Mind you, to be fair, when in election mode, its very important to do anything at all that will appear to be popular.
Political survival is the main game and the consequences of your decisions made prior to an election doesn't really matter too much as it " was a good idea at the time ".
If anyone recalls the absolutely ridiculous commentary from Labor's Chris Bowen at the time who stated that irrespective of what Kenneth Hayne's recommendations were going to be, Labor would implement every single one of them......without even seeing them or assessing them.
So, if Kenneth Hayne had come out and said " ban all forms of Intra Fund advice fees charged to all Industry Fund members and only charge those members who access that advice"........I wonder what Chris Bowen would have done then had the Labor party won the last election ?
The Govt enforced the MySuper regime upon many Australians who were not disengaged at all from their superannuation accounts with a ridiculous parameter that assumed if a member had not made an investment decision away from the default investment option they were obviously disinterested and not engaged with their super fund.
What about those members who had $350,000 in a Balanced fund, were a balanced investor and had regular contact, advice and discussion with an adviser and were happy with the long term investment performance of that default option. Were they disengaged ??
The primary reason the Govt enacted the MySuper transfer process was to deliberately cut out grandfathered commission payments to advisers many of whom were providing advice, guidance, education and service.
Now having done advisers over on that front, the Govt now want to again dictate that for all those members who have MySuper options they can no longer pay for any advice fees from those accounts.
This is simply insane. Are we in a dictatorship or a democratic society ??
If a MySuper member account of $200,000 were to earn a healthy investment return of 10% for the year and gain $20,000 in value, the Govt is saying that the adviser fee of .66%p.a ($1452p.a.) cannot be paid from the superannuation account but instead the member should find the money from other sources and from post tax monies, making the access to advice more expensive for that member and to take funds from cash flow needed for other living expenses.
If anyone could dream up a more insidious and manipulated idea without any benefit to the superannuation member then let's have it now.
The over arching controls and dictatorial stance this Govt is applying to superannuation is appalling, unproductive, confusing and counter beneficial for the members who want to and elect to pay for advice.
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