How Mercer is delivering industry fund intrafund advice
Key industry superannuation fund, Care Super has confirmed that it dropped Industry Fund Services (IFS) advisers to move its comprehensive advice provision inhouse while handling the intrafund advice responsibility to its administrator, Mercer.
Care has outlined to a Parliamentary Committee the manner in which it transitioned from its financial advisers being employed and licensed through Industry Fund Services to being employed in-house, with the intrafund function being undertaken by its administrator.
What is more, it has confirmed that members of the superannuation fund are able to access comprehensive advice for $395 an hour with the services being “provided by fully-qualified financial planners who have no other interest than to act in the best interests of members”.
“Over the past five years CareSuper has expanded resourcing in this area from three advisers to six advisers who provide non-intrafund advice. During the past two years CareSuper has transitioned from the advisers being employed and licenced through Industry Fund Services and assigned to CareSuper, to being directly employed by CareSuper as Authorised Representatives of Industry Fund Services,” the superannuation fund said.
“Under both arrangements the advisers are paid salaries with no incentives such as commissions or bonuses. CareSuper’s general target remuneration position for employees is the median of the ‘all profit to members’ financial services sector. It undertakes periodic benchmarking to confirm its position.
“The main activities of the advisers who provide non-intrafund advice include providing both general and comprehensive advice to members and their spouse only, education sessions (for example, seminars and webinars), along with completing all training as set by their licensee, continuing professional development standard requirements as set by FASEA [Financial Adviser Standards and Ethics Authority], and the required training as a CareSuper employee (e.g. cyber security, AML/CTF).
“Financial advice is one of many services that the fund promotes and offers to its members, and the advice function is not a separate business to the superannuation fund.”
Where intrafund advice is concerned, Care said resourcing had expanded from two to four advices, but the advice was provided by “our administrator as part of the overall range of services it is contract to deliver and is not a separate or additional charge”.
“Intra fund advice is offered to members as part of their membership as it is reasonable that they can expect answers to questions directly related to their interest in the fund. These advisers do not generate revenue for CareSuper.”
“These advisers are employed and licenced by our administrator. As this is an outsourced service arrangement, we have no oversight of or influence on the actual remuneration paid to these advisers,” it said.
“Over a year ago CareSuper transitioned intra-fund advice from the advisers being employed and licenced through Industry Fund Services, to advisers being provided through our administrator. Financial advisers employed by CareSuper can, but generally do not, provide intrafund advice. A recent example of these advisers providing intrafund advice was to meet the significant increase in demand following COVID-19 outbreak. Otherwise the responsibility for intrafund advice rests with the administrator.”
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