Jones sets the trustee/adviser record straight

Ross Jones

Australian Prudential Regulation Authority (APRA) deputy chairman Ross Jones has shed some light on APRA’s perceived non recognition of the role of the financial adviser as revealed in an inquiry into superannuation.

Speaking at an Investment and Financial Services Association luncheon, Jones said the Parliamentary Joint Committee on Corporations and Financial Services inquiry into superannuation received a large number of submissions from advisers concerning APRA’s investment management circular, which was revised last March after industry and government consultation.

“The issue raised in some submissions seems to be that trustees can be put in a difficult position where they need to comply with the APRA circular regarding the need to base investment strategies on the fund circumstances while trying to respond to individual member choice,” Jones explained.

“While the SIS [Superannuation Industry Supervision] Act does not expressly prevent a trustee from considering financial planner advice, the trustee must consider all the circumstances of the entity when formulating and implementing an investment strategy — consequently, financial planner advice can only be one input into the process.

“APRA continues to have concerns regarding investment strategy issues, particularly if trustees were to abrogate responsibility in favour of members themselves or their financial planners.”

Jones said the committee in charge of the inquiry intends to report on its findings within the next few months.