Intra-fund advice to stay exempt
The Federal Government has reiterated that intra-fund advice will receive exemptions from the Future of Financial Advice (FOFA) adviser charging regime, which is in line with the Stronger Super recommendations.
In his speech to the Financial Advice in Super Symposium — organised in part by the Industry Super Network (ISN) — Parliamentary Secretary to the Treasurer Bernie Ripoll said intra-fund advice works to engage Australians with their superannuation.
Ripoll said the new rules on intra-fund advice will mean that the cost of more complex advice provided to members cannot be spread across the general membership of the fund, which would prevent disengaged members having their super savings eroded by "unnecessary fees".
"As well, in line with the Stronger Super recommendations, the Government has announced that it will exempt intra-fund advice fees from the FOFA adviser charging regime," Ripoll added.
This particular point in the Stronger Super exposure draft released in May 2012 caused confusion in the financial planning industry, which demanded clarity around the intra-fund advice-charging regime.
"Recognising it's appropriate that super funds continue to provide intra-fund advice to their members, funds will be able to charge collectively across their membership to cover the cost of that advice," Ripoll said, adding superannuation funds would still be subject to the best interests duty and ban on conflicted remuneration.
Ripoll also criticised the Federal Opposition for lack of support for reforms in Parliament.
"Despite the bipartisan nature of the initial Parliamentary inquiry, the Opposition did not support the reforms in Parliament," he said. "In fact, there were 12 divisions on the issue of conflicted remuneration alone."
The Financial Advice in Super Symposium was held yesterday in Melbourne and was attended by ISN CEO David Whiteley, Industry Fund Services CEO Bill Danaher, Member for Bradfield Paul Fletcher and the Australian Securities and Investments Commission's Peter Kell, among other industry participants.
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