The Australian Securities and Investments Commission (ASIC) has issued a consultation paper outlining its proposals for changing fees and costs disclosures for superannuation products and managed investments schemes including removing advice fees as a line item.
Releasing Consultation Paper 308 today, the regulator has told the industry that it has until 2 April to make submissions on the proposals and is specifically seeking feedback with respect to compliance costs and the likely impacts on competition.
Core to the Consultation Paper is ASIC’s proposal to modify the fees and costs template for superannuation products, including presenting all administration frees and costs as one line item by merging administration fees and indirect costs.
ASIC is also proposing to remove intrafund advice costs as a line item and include the costs in the disclosure of administration fees and group together ongoing annual fees and costs separately from member activity related fees and costs.
The regulator is also proposing to remove the ability of superannuation trustees to elect to treat certain types of costs as indirect costs rather than administration fees or investment fees, by combining them into other line items.
Discussing the rationale behind removing advice fees as a line item, the ASIC document said that the fees and costs template related to a very specific type of financial product advice – intrafund advice costs – rather than personal advice and that to do otherwise risked “potentially confusing the casual reader”.
The ASIC paper said the regulator believed the move would “simplify the information provided to consumers, which may improve consumers’ understanding of the fees and costs they will be charged for their investment and therefore assist consumer decision making”.
“Including intrafund advice costs as part of the new administration fees and costs line item ensures that these costs are still captured as part of fees and costs disclosure,” it said.
Comments
Hello ASIC, intra-fund advice is personal advice!! Industry fund financial planners complete fact find documents with clients and personalise the advice with giving SOA documents as well. The RC slammed the banks for charging product based advice fees but somehow industry funds can do this because they charge “membership fees” even though not everyone uses their advice services. Another classic example of how ASIC are obviously protecting industry funds while they kill the rest of the FPs who actually have an obligation to act in the best interest of clients unlike the 100% conflicted intra-fund financial planners who only flog the in-house products.
Let's hope for an across-the-board fee disclosure regime that requires both retail and industry funds to make their fees and charges easily comparable by existing and potential clients. The trustees should have been acting in the interests of their member by ensuring there were no hidden fees and charges.
"The trustees should have been acting in the interests of their member by ensuring there were no hidden fees and charges."
Do you clearly understand your statement Headware?
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