Big Queensland public sector super fund, QSuper has revealed it is considering allowing individual members to authorise external financial advisers to deduct advice fees.
This follows on from the fund having in June announced its withdrawal from provision of comprehensive advice.
The fund has revealed its consideration of the issue in answer to questions on notice from the House of Representatives Standing Committee on Economics, at the same time as revealing that it last financial year paid $13,606,589 for the provision of intrafund advice to its member via its wholly-owned financial planning subsidiary, QInvest Limited.
Asked whether it allowed members to use their funds to pay for financial advice, internal financial advisers or external advisers, the superannuation fund said it did not have any current arrangement for either internal or external financial advisers to deduct an advice fee.
“Last financial year, QSuper allowed QInvest financial advisers to deduct the sole purpose test portion of the comprehensive advice fee from a members account, if expressly authorised to do so by the member,” it said. “However, this service closed to new bookings on 6 July, 2020.”
“As a consequence of closing this service, QSuper is in the early stages of considering whether it is in the best interests of all QSuper members to facilitate individual members authorising external financial advisers to deduct an advice fee (where permitted under relevant laws and codes of practice).”
In terms of intrafund advice, QSuper said it had appointed QInvest Limited (QIL) to provide certain services, including the provision of financial advice services.
“These financial advice services are provided under a master services deed (MSD). Under the terms of the MSD QSuper pays QIL for the intra-fund component of financial advice, by way of a fee for the service provided to QSuper members rather than for a specific number of advisers,” it said.
“While the QSuper Fund has no financial advisers, QIL has 59 financial advisers, working across both intrafund and comprehensive advice, as at 30 June 2020, who provide financial advice to QSuper members under the agreed MSD.
“In addition, QSuper members may also appoint financial advisers from other unrelated financial planning businesses. QSuper works with these external advisers to the extent that individual members have provided the authority to do so.”
Comments
It’s your Super, until you want to use it to help get super / retirement planning advice.
And then it’s the Industry Funds Trustees decision to not allow you access to advice services as they won’t let you utilise your own super for your own advice.
How is this even legal, let alone Ethical Industry Super ?
Wonder how this is in the clients best interest or just the super fund as a sale retention tool..
Headline should read even super funds cannot deliver advice to clients and its easier to give intra fund advice which is actually same topics as personal advice with removal of all client protection, best interest etc ASIC own report into super advice found half of all advice was not in the clients best interest on only 200 odd files which was enough to recommend LIF on the insurance....
Shows they are only trying to get rid of advisers, just like they tried to do to the mortgage brokers recently...
What most of the industry funds are doing is blocking access to advisers for clients it would be the same if ATO said we will only deal with our own accountants and you can't use external accountants this is so wrong
Hi Ben, It's not as simple as allowing the fees to be deducted, there is also an expectation from the regulators that the trustee will 'vouch' for the advice that has been provided when fees are paid from a super account. ASIC and APRA wrote to all super trustees wanting to know what governance they had in place on any advice fees deducted from super. As you can imagine, setting this up is costly and a risk that is too significant for many industry funds to handle. I think they will solve it but it's just not easy and not quick that's all.
Yep for Industry Super its much easier to charge every member Hidden Commissions, zero disclosure of these Adviser fees charged to all and provide Intra Fund Advice to the few members that benefit from it.
And as per recent articles, this Intra Fund Advice often goes way beyond what this Intra Fund Advice rort allows and covers Full Retirement Planning. All paid for by Hidden Commissions charged to every member as extra Admin fees.
Compare the Pair - Industry Super the only Supers Charging Hidden Commissions to pay for Conflicted, Vertically Integrated Advisers, when most members are paying Adviser Hidden Commissions for NO SERVICE !!!!!!!!!!!!!
No wonder it's too hard to pay Real Advisers.
That doesn't make sense, why do we have licence that checks advice and PI cover then.... this is just another way to retain customers and also assumes that the fund itself isn't that great, the advisers fee for advice doesn't change if its a hold recommendation, switch investment or rollover to another fund the client will be charged the same amount that argument doesn't hold up, super fund might as well say only we can't charge you and no one else can.. they could limit the amounts charged so they are the same as a super fund internal advisers if they were that concerned, the super funds don't have offices in every location and their are advisers that can help service those clients.
You have to remember even in industry fund their what 15 funds with 10 investment options, how does the client know they are going to meet their retirement goals and living expenses, who helps them setup a pension account and draw down the money correctly to help preserve the balance. If they are intra fund advice which is a fee for no service
I guess ask ASIC and APRA that question, don't blame the funds? The regulators are the ones insisting they also have governance over the advice??
Why can any retail fund give access then? retail super funds will let any adviser get a code to give advice, turn to industry funds no we don't allow that because we have an internal rule.
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