Super funds turn their back on intra-fund relief

Superannuation funds appear to be rejecting the intra-fund advice relief offered by the Australian Securities and Investments Commission (ASIC) and are instead attempting to use the information contained in the associated Regulatory Guide 200 to develop their advice offerings.

Industry Super Network (ISN) executive manager David Whiteley said few super funds were using the Class Order relief afforded by ASIC under CO 09/210 Intra-fund superannuation advice.

Association of Superannuation Funds of Australia (ASFA) chief Pauline Vamos said she knew of only one fund that had taken up the relief.

“I don’t expect ASIC to be inundated [with relief applications] at all,” Vamos said.

Instead, it has been the associated Regulatory Guide 200 that has assisted trustees by “providing some clarity in those grey areas between factual information, general advice and personal advice”, Vamos said.

“The relief was nice, but not really appropriate for funds. It’s the guidance that they really like,” she said.

According to Whiteley, the information contained in RG 200 provides guidance on “how to, if you like, navigate your way through the current regulations, and we’re encouraging funds to take advantage of the guidance notes as opposed to applying for any relief”.

“Our view has been that the guidance notes that ASIC provided are a more suitable method for funds to provide advice to their members.”

Whiteley said a number of major funds are now “gearing up to identify the best way to take advantage of the guidance notes”.

“In particular, they’ll be looking at how they can provide financial advice to their members [on a] much greater scale,” he said.

In order to take up the intra-fund advice relief, fund trustees must be licensed to provide personal advice, rather than simply general advice. A spokesperson for ASIC said it was the regulator’s understanding that “a few funds are in the process of applying to extend their [Australian Financial Services Licence] in light of the intra-fund relief”.

“It is very early days, but we are encouraged by the initial response,” a statement from ASIC said.

West Australian super fund GESB emerged as one of the first funds to offer free, personalised, limited advice to its 310,000 members. However, GESB is not doing so under the intra-fund advice relief, according to GESB head of wealth management Fabian Ross.

GESB now offers general, single-issue and complex advice, but Ross said this “should all be done within the same regulatory framework”.

While Ross acknowledged the intra-fund advice relief does provide safety for super fund trustees giving personal advice, “from our perspective it’s just making sure we put rigid corporate governance around [the advice process], because we want to protect our licence”.