QOA review moves to empower super funds

The Government has released the final report of the Quality of Advice Review (QOA) — a review of regulations and standards governing the provision of financial advice.  

Independent chair Michelle Levy — a partner at global law firm Allens Linklaters — handed down 22 recommendations, two of which concerned the provision of advice in the super industry.

Recommendation 6 called on the Government to enable super fund trustees to “provide personal advice to their members about their interests in the fund”, including when supporting a member’s transition to retirement.  

“In doing so, trustees will be required to take into account the member’s personal circumstances, including their family situation and social security entitlements if that is relevant to the advice,” Levy stated.

Additionally, the recommendation has affirmed super fund trustees “should have the power to decide how to charge members for personal advice”.

Accordingly, Levy called for existing restrictions on collective charging of fees to be removed — section 99F of the Superannuation Industry (Supervision) Regulations Act. However, she stressed this would not enable trustees or another adviser to consider all matters relevant to that advice.

As such, advice could not include recommendations incidental to the advice about the member’s interest in the fund.  

“These matters are likely to include the member’s financial situation, family situation, social security and health,” Levy noted.

“In many cases the trustee (or adviser) would be required to do so in order to meet the good advice duty.

“If there is any doubt, this should be clear in the law.”

Separately, as part of Recommendation 7, Levy pushed to enable trustees to pay a fee for personal advice from a member’s account. This would specifically relate to the provision of personal advice about a member’s interest in the super fund.

“The objective of this recommendation is to provide superannuation fund trustees with more certainty about paying advice fees agreed between a member and their financial adviser from the member’s superannuation account and ensure that adviser fees are not paid in breach of the SIS Act and are not taxable benefits for members,” Levy added.

The Albanese Government was yet to publish its response to the QOA’s final report.