ASIC delivers another relatively clean sheet on intra-fund advice

The Australian Securities and Investments Commission (ASIC) has again delivered superannuation funds a generally clean bill of health with respect to how they have been using intra-fund advice, even with respect to early release superannuation (ERS).

The regulator’s comparatively clean bill of health was delivered as part of its report on how superannuation funds supported members during COVID-19 in circumstances where it had reviewed intra-fund advice on early release and on insurance.

It said the ERS surveillance covered 27 trustees, and included 11 trustees that indicated they intended to rely on ASIC’s temporary no-action position on intra-fund advice related to the ERS, which was issued on 14 April 2020.

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“The surveillance found that actual instances of advice provided under the no-action position were very limited. We did not identify any evidence of trustees inappropriately using intra-fund advice to discourage members from applying for the ERS,” ASIC said in the report.

It said that as part of checking the support trustees provided to members in relation to insurance issues, ASIC requested samples of insurance related intra-fund advice.

“Of the 18 files collected, eight were assessed as complying with the best interests’ duty and related obligations. The remaining files were assessed as non-compliant because of issues with procedures and record keeping. We did not identify any serious consumer detriment and the compliance rate was similar to the compliance rate identified in ASIC’s December 2019 Report 639 Financial advice by superannuation funds.”

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Corrupt ASIC will never find anything wrong with Industry Super.
It’s perfect Regulatory Capture Corruption.
We can all see this is heading for an expansion of Intra Fund Advice to full Advice, zero real compliance.
Whilst killing Real Advisers with ever increasing BS REGS, Red Tape costs and hate.

Did this review exclude retail super funds? It's not clear. If not then it is a good result for both retail and industry super trustees.

Completely conflicted advise paid for via hidden commissions and you Hedware are now in March 2021 saying a "good result"?

They pinged statewide and rest in the last month... so i guess this is out the window?

18 files are checked? If they are only checking 18 file why is the ASIC levy going up so much. A work experience kid could do that work in a week. Not to mention 55% of files fail BID yet it is a clean bill of health? Where is the 10 year look back on intrafund advice? It must be nice to know you can whatever you want and ASIC will turn a blind eye. The bias and incompetency of ASIC is unbelievable.

intrafund doesnt offer ongoing service agreements, so what do you want them to look back on?

So why does the Trustee continue to charge members for Intra Fund Advise when no advise or service has been provided?

they don't charge...

How about a review of every file/case to see if the BID duties have been satisfied, and where they haven't and the client has been put in a worse position that they are compensated? Personal advice provided under the intrafund arrangement does not get a carve out of BID obligations. Looking at the results this is not the minor issue that ASIC is trying to sweep under the carpet to protect their union fund mates. Essentially all I am saying is a look back to make sure personal advice given under intrafund arrangements is in line with the BID rules, which it seems it is not. I just want ASIC to actually do their job.

Of course they found nothing. Genuine intra fund advice is personal advice which requires a licensed adviser and SoA. That's what ASIC investigated.

But most superannuation fund advice is given by unlicensed call centre staff without any documentation. There are no "files" for ASIC to check. They need to be checking full call centre recordings, not selective sanitised "files".

18 Files !! Wow, my dealer is looking at 150 of my files and I'm a small business! wtf.

The review covered 27 trustees and the 18 files you refer to were insurance related, not the full coverage of the review. Still a very narrow scope to only review 18 files. The article doesn't mention how many total files were reviewed though.

This is an embarrassing and shameful effort by ASIC. Compare the pair :
A. Real financial planners, who give advice which is highly rated by consumers (on par with the most trusted professions) and whose clients sign off on the adviser remuneration:
-> More than 200 files checked in a biased review which targeted advisers with high volumes (ie. those thought to be engaging in churning). A 37% failure rate results in substantial changes across the board, cutting adviser income, an unprecedented ramp-up in red-tape, livelihoods destroyed and a mass exodus of financial planning.
B. Industry funds, with links to unions and the ALP, whose advisers are totally conflicted, paid employees of a product provider, who take fees without permission from consumers who don't engage with their services and who receive special dispensation from the red-tape crippling real financial planners:
-> 16 files reviewed. A 56% failure rate results in.... a tick of approval from the regulator!

Unbelievable. We need a Royal Commission into ASIC. There is something seriously wrong with this organisation.

Well said.

ASIC is corrupt, broken and needs to be fisted, oops sorry I mean fixed.

What fees are they taking? BTW Retail funds do intrafund advice also... people are so ignorant.

You know.... the huge $1.50 per week or so that is disclosed in the PDS. The $1.50 that covers a range of offerings / services including advice or contact center factual information if you want it...... that fee. The requirements for intra fund advice are misunderstood by many on here.

so the admin fee? The revenue of which pays for the fund to operate? staff, call centre, IT, systems etc. Including to pay for intra fund advice, which is a legislatively accepted type of advice... so what should happed again?

So everyone pays that $1.50 per week even if they do not use the services? If you want it are very telling words. What about if you dont want it? Why can't these members get a refund for fees paid for services only offered but not required or delivered? Why cant these members opt out of services they dont want, or need? That is fee for no service plain and simple.

Sure.... but they may not use admin, or the website, or whatever... Its a legislatively accepted form of advice? Change the rules sure... but otherwise...

Choppa, so tell me what the fuss was over commissions, Grandfathered Commissions, Insurance Commissions, Conflicts, volume bonuses, gifts, definitions around independence, Opt-ins, FDS's, FASEA Codes and informed consent, sole purpose test and my pick of the bunch, community expectations that advise be pure of and influence of product sales - yet product (drug companies if you like) can sell direct to the retail client (patient) without a Financial Adviser (Dr) and that's OK?

Sure, it's legal but still not sure why FASEA is needed if I can simply work for Australian Super and recommend Australian Super all day every day and that is legal.

Are you trying to suggest that the $1.50 per week is the only admin fee?

It really is beyond astounding. ASIC is now a 'nothing entity', for some reason hell bent on sending financial planners broke for trying their best to look after clients. Its main purpose seems to be to make our lives difficult with regulation and ignore everything else in the world. What really is the point of ASIC's existence now? Shut it down and start again, with one regulator for products and one for advice.

Exactly. ASIC has failed in its intended role of protecting consumers. ASIC's bias and incompetence is ultimately pushing more consumers towards dodgy unregulated advice.

The government should view the Shipton/Crennan situation as the final straw for ASIC and start over. The new regulatory body should be funded by taxpayers, to remove the financial incentive ASIC currently has to focus on the licensed providers who fund it, while ignoring the unlicensed providers who cause the most consumer harm.

Just paving the way for the expansion of intrafund advice as the only measure to address the spiralling cost of advice to the public.... We all know how this plays out.

Also, did ASIC ever consider the insurance clients lose when they are tricked into joining an Industry Fund? The call centre sales staff at the Industry Funds say "there are no exclusions on the insurances you get when you join". Whilst this technically isnt a lie, the clients arent told that at claim time anything which can be linked to a pre existing condition is excluded.

Its a shame that the client only finds this out at claim time and they have signed away all their rights when they accepted the Industry Fund contract. If an adviser did this we would be sued, lose our house, our business and our license.

If union super call centre staff giving personal financial advice put clients in a worse position, they should lose their licence too. Oh hang on a minute...they never had a licence in the first place did they?

This is why many union super funds are reducing their adviser numbers. Much easier to give unlicensed advice without the need for SoAs or Best Interest Duty. And they know ASIC will never do a thing about it.

This is so ignorant. You actually dont know what you are talking about.

tricked? Perhaps they wanted cheaper fees and superior performance, which means consumers will research and come to a decision.

Hi bystander. Welcome to the MM comments. Do you sit next to Hedware at the union super PR office? I'm guessing he's having a day off today and asked you to fill in for him. Just an FYI, most people on here actually understand fund performance figures. So you'll need to come up with something a bit better than regurgitating deceptive advertising claims.

That's cool man, stay ignorant. Not sure you can comply with the c.o.e, but thats cool. Cant teach an old anon dog new tricks eh?

Which ISF do you work for, soooooo obvious

I dont actually... licenced adviser who accepts the role industry funds play... just not ignorant of the facts.

A licensed adviser who recommends union super funds on the basis of their misleading & deceptive advertising? Wow, I'm not sure how many Corps Act and FASEA Code breaches that involves. If you did it in relation to retail funds you would be hung, drawn, & quartered. But I guess you feel quite safe in the knowledge that regulators don't enforce the law in relation to union funds.

My plan, take 3 ISF clients a week. Can't beat just move them, ad soon as I explain their Ponzi sceme the client signs. I know it's not much but if we all did it.......

and you meet best interests and your code of ethics how?! ponzi scheme? cmon.

Ok, bid is easy cause I actually do a fact find and match my clients best interest to investments. Ponzi? Who values ISF assets? They do, yes my 1999 mazda is worth $100,000. Backpackers giving personal advice, yes iv tested it out.... Your reply?

thanks for proving your ignorance... have a look at the apra guidelines on valuation of assets

Dear bystander.. Save some tax "hey put it into super", grow some wealth "hey put it into super", super super super super..... Don't start telling us what's in the best interest of clients Mr/Mrs Industry Super salesperson. You're not an adviser, you're a product flogging brainwashed wannabe. You don't know diddly. Go back to the "cult" flogging more Hesta/AwareSuper or whatever boiler room, I mean call centre you had a 2 minute break from. Come back when you can recommend cash in an Australian Bank , and let's talk about best interest and advice fees then...Goodbye.

ok yogi bear... whatever helps you sleep at night (I sleep well). Please relieve yourself of the ignorance... open your eyes. For the record, licenced adviser giving wholistic advice in small business.

You're like a Fax Manufacturer claiming Email is going to be good for business. Given your enthusiastic support for an un-level playing field I suspect you're going to be in some trouble with your compliance team. Disappointing someone who claims to be "holistic small business adviser" can't appreciate that a playing field that is not level or equitable is not in the best interest of anyone, the client, the industry as a whole, because it divides. You cannot regulate the death out of one adviser and allow another to take some serious short cuts in another. I suspect you might be telling some porkies.

Hey yogi - just loving your rants - doing much better than the usual ones.

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