Govt reinforces intention on MySuper advice fees

The Federal Government has reinforced that it intends to legislate to prohibit the deduction of advice fees from MySuper accounts.

The Government’s intentions were reinforced by the Assistant Treasurer, Stuart Robert in an address to the SMSF Association conference in Melbourne on Friday where he said the move would represent a part of the Government’s response to the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Robert’s statement came at the same time as he announced that, on the basis of feedback from stakeholders, the Government had decided to extend the arrangements around the work test exemption for those aged between 65 and 74 with total superannuation balances below $300,000.

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He said that the Government had decided to allow those who used the work test exemption in the year they turned 65 to access bring-forward arrangements for non-concessional contributions.

“These individuals will be able to make up $300,000 in contributions from after-tax income, providing extra flexibility to get their affairs in order as they prepare for retirement,” Robert said.

He said the change would also align the contribution rules for the work test exemption with those that apply under the work test, make the system simpler to understand for members.

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But fees for inter fund advice, charged to every single member with the clear intention NOT all members use the service. Sounds like, smells like and tastes like, Commissions and fee for no service but this time, by legislation and only for a few.

Could not agree more I can't believe they argued that cost of advice is more affordable and its easier to get advice which is how things used to work under the commission structure

The difference is the banks and industry super get them and they can be trusted. Self employed planners can't be trusted to buy fish and chips and get the order right according to he government and regulators.

Oh we cant charge adviser fees from My Super, so what! As if you would recommend it anyway??? My Super is for people without advisers, that's what it was made for. Not everyone needs advice, this is true, so my super is a good idea for those people. Almost lunchtime, time for chips and fish hey Anon.

Hi 'Hang on'.
Just waiting for my fish and chips to arrive so I'll be succinct.
Not all Financial Planners want to be 'investment specialists' and maybe a MySuper product may be ok for them if they just want strategic advice in relation to super.
Cheers mate.

This is an issue. What if someone comes to see you to ask if they are on track to retire. You go through it and advise them to retain their mysuper fund (shock, maybe even an industry fund) and reduce their spending and pay off their debt quicker and start some salary sacrifice. It shows them they will get a steady standard of living from now on. You also tell them to salary sacrifice a little extra this year to cover your 1 time only fee tax effectively for them.
How have we got to the stage where this is not allowed?

I believe it is allowed. the client will just have to pay upfront and it will not be tax deductible to the super fund or the client. However you also need to factor in the changing default investment options and returns, and make sure you understand the risk profile of the fund. Suggest you make up a fund profile check list and ask the super fund to fill it in. They will refuse so you can't provide advice and can send the client back to the super fund for advice.

you forgetting that this clients are getting charged for advice for intra fund advice which means they will be charged double and asic will hunt you down. Also your dealer will not let you charge like an accountant because you have licence to give personal advice not general advice and asic will hunt you down

So you can't pay for financial advice from your super but you can pay for IVF from your super. Makes sense.

Comment of the year, love it!

Who are the "Stakeholders" that provided feedback to Robert? AFA, FPA, ASIC, APRA, Banks, Industry super funds, Choice, Unions,his boss or some old bloke near his life expectancy who will not be around to see the mess left behind?

I don't work for free. So those people in a mysuper product will need to pay directly (not tax deductible advice) or talk to the independent adviser in the super fund. ASIC will then need to specifically review mysuper advice provided by the super funds for compliance, since this area will be managed predominately by the super fund independent advice services, or the government will need to assure themselves that the advice is in the best interest of the client via another mechanism.

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