Report intra-fund advice problems to ASIC says Hume

Financial advisers who believe superannuation funds are breaking the rules around intra-fund advice should notify the Australian Securities and Investments Commission (ASIC), according to the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume. 

In a letter responding to a West Australian adviser’s concerns about intra-fund advice, Hume said superannuation fund trustees were expected to have internal policies in place to “manage the costs of intra-fund advice and ensure it is not used excessively by any particular member to the detriment of others”. 

“Where you have concerns that a fund may not be disclosing fee arrangements or providing intra-fund advice in accordance with the law, I would encourage you to contact ASIC,” Hume’s letter said. 

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The minister’s letter also suggested that the Hayne Royal Commission had given intra-fund advice a clean bill of health. 

“The advice and superannuation industry was thoroughly examined as part of the Financial Services Royal Commission and in his final report, the commissioner noted that ‘there is no suggestion of misconduct in relation to intra-fund advice’,” Hume’s letter said. 

“There are rules in place to ensure to ensure that intra-fund advice is not ongoing advice, and cannot be complex or about topics other than the member’s interest in the fund,” it said. “In addition, there are obligations on advisers providing intra-fund advice including the best interest duty.” 

“I note that the implementation of the Royal Commission recommendations such as the new professional discipline regime for advisers will apply to those offering intra-fund advice,” Hume’s letter said. 

   




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Um Janey, sweety, the intra-fund advice rules ARE the problem.

INDIVIDUALS LIKE YOU ARE THE ONE GIVING OUR INDUSTRY A BAD NAME. REGARDLESS OF YOUR VIEW ON INTRAFUND YOU COULD HAVE SAID SAMETHING WITHOUT SUCH A SEXIST REMARK

Um, Pissy, sweety, please lighten up, and please please try to identify tongue in cheek humour and satire.

These eternally-offended ever-so-precious petals, who get so easily upset, spit the dummy, chuck a little unendearing tanty, and then push their own self-righteous views down everyone else's throats are the reason people like Trump have gained power.

The fact, sweetness, that you also wrote in shouty CAPS also displays so much about your personality and intestinal fortitude.

Maybe if we had more stoicism and logical debate, and less of this over the top reactionary emotional fanfare, darling, we'd all be in a far better place.

Can't you just open your heart more, especially during these challenging times, and be a little more accepting of your fellow MAN, sweety?

Hahaha that is gold!!

So over the offended PC brigade

Wow, caps, really? Very mature form of expression. Not at all a good example of women, I am embarrassed though mainly for you

The problem with relying upon what the Royal Commission said, was that Hayne didn't understand. He though that intra-fund advice was only general advice, and not personal advice. He also made this statement about no issues with intra-fund advice before ASIC had even looked at superannuation fund advice. ASIC released Report 639 on Financial Advice by Super Funds in Dec 2019, revealing that 44% of intra-fund advice was non-compliant.

Indeed much of the RC suffered from Hayne & his fellow lawyers not understanding the subject matter. They were reliant on guidance from others, and took far too much notice of those with chronic bias and vested interests such as ASIC, Choice, and the union super funds.

I thought the intra fund advice had an exemption, a carve out, so what she is saying makes no sense?

This response by Minister Hume is appalling.
...." not used excessively by any particular member to the detriment of others"..!!!
What is super fund call centre going to say when member no: 12345 calls and says they want to discuss their nomination of beneficiary and last month they called to discuss their insurance cover ?????
Sorry 12345...... you have exceeded your annual allocation of Intra Fund advice credits and member no: 678910 want a go !!!......what a blitheringly stupid comment for a Govt Minister to even contemplate making.
When Minister Hume refers to Intra Fund advice not being able to be " complex" what exactly does she mean ?
Does an analysis of the members investment asset allocation, advice in relation to nomination of beneficiaries in respect to split families, second marriages, disabled children or no dependents, explanation of the Total and Permanent Disablement definition including the taxation implications upon claim and discussion around the linking of Life & TPD Insurance cover on their account resulting in the deletion of the Life Insurance if a TPD claim is paid, the consolidation of a second or third superannuation account into the existing account and analysis around insurance transfers or deletion of cover and calculations in regard to salary sacrifice and taxation impact all count as NOT "complex" because they are all very common questions that members would ask of Intra Fund advice and they all relate directly to that member's account.
How could it possibly be controlled as any form of ongoing advice when the member calls up to request advice on several different singular topics throughout the year??.....every time they call....it is a new piece of simple and singular advice.
I want Minister Hume to clearly explain how a salaried adviser paid by the superannuation fund and subject to bonus remuneration structures around "customer satisfaction and performance" criteria (aka: retaining members within the fund and consolidating other super monies into their account), are able to adhere to the best interest duty and able to adhere to FASEA Standards 3, 5, 6 & 7 ????
This is a complete rort and Minister Hume is hiding behind the conflicted Royal Commission out of fear of opening up the biggest can of worms she has ever seen.

It is becoming increasingly clear that Hume is an ineffectual lightweight. She needs to be replaced as Financial Services Minister by Tim Wilson.

She re-appointed Longstaff (the self-described 'ethicist') to another 3 years on the failed FASEA board. Say no more.

Totally agree. Throughout the FPA webinar the other day she just gave bland politically correct motherhood statements. Mind you, Dante was lightweight as an interviewer and asked no hard questions at all - shocking really how ineffectual both the politicians and our professional assoc are.

It was clear at the end Dante is well out of his depth. He spent 15 minutes talking about how Hume was personally managing lockdown then light weight then a complete unprofessional display at the end. Total disgrace yet again. Why is he still there?

So Intra-fund advice is good and has no problems according the Hayne and Hume.
Let's use that as the baseline.
How do we now role out advice across the broader financial planner network that meets the requirements of Intra-fund advice? I am just saying how about we join them rather than fight them, as fighting hasn't worked.
Perhaps every client we advise can be Intra-Fund advice if the provider/ dealer contracts say it is provided on their behalf.
I know it goes against everything the last Code of Ethics wants, but if its legal it's legal.
Just throwing it out there.

What we do is setup our own Super Fund, made by advisers for the whole industry, and become the intrafund workforce behind it. Then all our clients become members of our Super Fund, and we can provide advice and do what we want.

and don't forget, draw out excessive undisclosed high fees as 'consultants' like the unions do as well!

Intra Fund Advice fees are an amazing this - not only is there no requirement to provide service, but a member also has limits on the amount of service they can actually receive “manage the costs of intra-fund advice and ensure it is not used excessively by any particular member to the detriment of others”.
Can charge the fee all year, every year, deliver no service or advice, it's not an ongoing service but is charged ongoing, if you do use the service, you can't use it too much. And you can't opt out.

Why report something to ASIC. They have never investigated other items reported by advisers. these are gnerally seen as "biased" and "conflicted" and therefore to be ignored. I will not waste my time unless ASIC are forced to actually investigate reports.......

So although Financial Advisers have been screwed to the wall by both sides of Govt and ASIC for the last decade, Minister Hume is now calling for them to become the regulator's apprentice by reporting Intra Fund advice issues to ASIC ???
How about the Govt has the courage to tackle this systemic issue head on so the playing field across all advice is level?
What Minister Hume is really saying is that as long as the Royal Commission found that all was ok, then essentially it is not happening.....and if it is happening, we are not going to police it, but you guys can if you want to.
Close your eyes and it will disappear infers Minister Hume.
This simply cannot continue on in this way.........it must not, it should not.

In relation to Intrafund ‘advice’, the problem is that it isn’t clearly defined in legislation. Intrafund is simply alluded to in the Explanatory Memorandum connected to the 2012 Mysuper legislation. Something that even escapes Minster Hume.

Intrafund "advice" needs to be revisited & clearly defined in law, including addressing the gross inequity of compliance requirements for personal financial advisers, versus no compliance requirements for intrafund advice salaries & bonus paid advisers. ie you either get rid of the onerous & intentional ongoing Opt-in compliance burden that has been dumped onto personal advisers (Q. How many times is informed consent necessary?), or you apply ongoing Opt-In on Intrafund “advisers”, for their fees (& bonuses) for no service, for which their fund members never consent.

Even ASIC, under questioning in Estimates, has admitted that intrafund is personal financial advice, not simply general advice as described by Haynes in his flawed RC recommendations. And Haynes claim that Intrafund had no problems has become a total farce with the referral by the Australian Financial Complaints Authority has since referred StatePlus to the Australian Securities and Investments Commission over a potential breach of the law due to the wrongly-charged fees. (AFR 20 May 2020)

This simply becoming in industrial relations issue between 2 groups of advisers, which must be addressed in law (not via ASIC). And this issue will keep coming back year after year, with ongoing calls to fix the inconsistencies that now clearly exist, until it is resolved.

Reporting to ASIC against Intra fund is something they know will never happen or come from an adviser - who has the time, and there is little if no paper trail on intra fund advice, so nothing that ASIC would require even if it wanted to, to press a claim. Another poster suggested FInancial Planners should construct their own Fund, as radical as it sounds it may not be so crazy. A fund, we are not conflicted we have no ownership in it, it ticks all the research house boxes, it could be a white label of bigger fund, with lower costs - but it would get us a seat at the political table - something the Professional associations can't.

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