The Corporate Super Specialist Alliance (CSSA) has expressed serious concerns around the way the intra-fund advice fee is structured, claiming its current form does not assist the improvement of quality of financial advice.
CSSA, which provides provide financial advisory services to corporate superannuation funds, used its submission on the Future of Financial Advice (FOFA) legislative amendments to call for the separation of the intra-fund advice fee from the administration fee.
The superannuation fund administrator has the ability to pass on part of its fee to a third party in order to pay for the provision of general advice and services within the fund.
CSSA said the advice fee is currently not known to members and is "effectively paid as a secret commission".
"We suggest that the intra-fund fee should be negotiable at the workplace level in the same way that administration fees are negotiable," the CSSA's submission read.
"Intra-fund fees should be a ‘dial up' fee structure, with the fee being based on the amount of work required at the individual workplace," the industry body added.
"This can vary greatly and is influenced by factors such as the location of the workplace, the demographics of the workforce and the requirements for policy committee and other meetings."
The main problem with corporate superannuation, CSSA said, is that advice is provided to the employer, but the fees are typically deducted from the members' accounts.
The association proposed the alteration of the MySuper legislation in order to allow the payment of a plan service fee, if this fee is agreed to at the workplace.
"This fee could then be disclosed to members so they are aware that they are paying a fee for the services of an adviser, and so that it is not confused with the intra-fund services provided by the superannuation fund itself," CSSA said.
"This may in turn encourage members to use the services the adviser provides."
