Super trustees not getting free ride: ASIC

Super trustees providing limited advice aren’t being given “a free ride”, a representative from the Australian Securities and Investments Commission (ASIC) has stressed.

Speaking at this year’s Investment and Financial Services Association (IFSA) conference on the Gold Coast, Deborah Koromilas, senior executive leader, financial advisers, said while trustees would have relief from financial services regulation (FSR), such relief would not be available at common law.

“If you don't give advice that is appropriate to your client, your client can sue you for the fact that this advice is negligent. Now that has nothing to do with the Corporations Act,” Koromilas said.

“The Corporations Act merely puts into legislation a standard in relation to negligent advice. So to think that somehow somebody's been given a free ride here because they don't have to meet a standard in the legislation is really a misunderstanding of the concept that there's another piece of law out there that you still have to adhere to,” she told delegates.

Acknowledging that negligence laws could only attract civil penalties, Koromilas said the important issue was improving access to advice.

She further argued there was benefit in the limited advice to planners in terms of stripping down compliance layers and lowering the cost of advice.

Limited advice is within the realm of personal advice, Koromilas said.