The Royal Commission has recommended that the deduction of any advice fee other than intra-fund advice from a MySuper account should be prohibited, while their deduction from choice accounts should also be limited.
Specifically, Commissioner Kenneth Hayne said deductions should be prohibited from choice accounts unless the requirements about annual renewal, prior written identification of service, and provision of the client’s express written authority (which the Commissioner recommended elsewhere in the report be required annually for ongoing fee arrangements) were met.
Hayne said that using superannuation money to pay for the sort of broad advice that was being charged for was not consistent with the sole purpose test prescribed by section 62 of the Superannuation Industry (Supervision) Act 1993, which required trustees to ensure that the fund is managed solely for identified purposes.
“It follows that the nature of the advice that may properly be paid for from a superannuation account is limited to advice about particular actual or intended superannuation investments,” Hayne found.
“This may include such matters as consolidation of superannuation accounts, selection of superannuation funds or products, or asset allocations within a fund. It would not include broad advice on how the member might best provide for their retirement or maximise their wealth generally.
“Any practice by trustees of allowing fees for these latter kinds of financial advice to be deducted from superannuation accounts must end.”