Super funds back MySuper deductibility of advice fees
The Government may drive people out of MySuper products if it completely removes the ability to deduct advice fees.
That is the warning issued by major superannuation industry organisation, the Association of Superannuation Funds of Australia (ASFA) in a submission filed with the Treasury.
In similar fashion to both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA), the ASFA has warned that by closing off the ability to deduct advice fees, members of MySuper products will be forced to move to choice products from which advice fees can still be deducted.
“There is a risk of inadvertently incentivising movement away from MySuper with the complete removal of the ability to deduct advice fees, as members will be required to move in order to receive advice, in circumstances where they do not have the means or inclination to pay for the advice out of pocket,” the ASFA submission said.
“It would also be inequitable to determine whether advice can be accessed based on the type of account or investment option a member has their superannuation invested in. Many consumers are likely to view MySuper as an investment option within their total superannuation account,” it said.
“Practically speaking, from a consumer’s perspective, the effect of the bill is to hinder access to advice and the retirement outcomes they aspire to.”
“As the ASIC [Australian Securities and Investments Commission] report on what consumers really think about advice noted, two of the three most common topics that survey participants said they had either received, or were interested in receiving, financial advice on were retirement income planning and growing their superannuation,” it said.
“One of the key barriers to getting financial advice identified in the report was cost.
If cost continues to be a significant barrier to getting financial advice, prohibiting the deduction of advice fees from MySuper may result in poor consumer outcomes. A growing number of consumers will not receive advice at all or will move to other investment options or products in order to fund the financial advice.”
Recommended for you
While returns and fees are the top priority for older Australians when it comes to their superannuation, more than one in 10 are calling for access to tailored financial advice.
Determinations by the FSCP since the start of 2025 are almost double the number in the same period of 2024, with non-concessional contribution cap errors and incorrect advice among the issues.
Whether received via human or digital means, financial advice is reportedly leading to lower stress and more confidence, according to Vanguard.
The new financial year has got off to a strong start in adviser gains, helped by new entrants, after heavy losses sustained in June.
