Separate advice costs, say actuaries
The cost of providing financial advice within superannuation should be separated out for superannuation fund performance reporting purposes as part of a broader subdivision of investment and administration costs, according to the Institute of Actuaries of Australia.
In its submission to the second round of the Cooper Review into superannuation, the institute has leant substantial backing to the approach suggested by two of its members - Colin Grenfell and Ray Stevens - involving the subdivision of fees and costs.
The institute submission argues for the administration component of superannuation fees and costs to be referred to as 'superannuation fees and costs'.
It then suggests these 'superannuation fees and costs' include advice costs that are not covered by specific advice costs.
The submission then argues that advice costs that are covered by specific advice be disclosed separately as a third component of fees and costs.
The institute submission acknowledges the likelihood that some funds might seek to manipulate any split of fees and costs to achieve a perceived competitive advantage but argues this could be addressed by the regulator requiring an auditor to certify the appropriateness of the arrangement.
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
