Fee for no service breached super sole purpose test
Superannuation funds which pay commissions to planners when no advice was actually provided to members may have been in breach of the so-called “sole purpose test” under the Superannuation Industry (Supervision) Act.
However, the deputy chair of the Australian Prudential Regulation Authority, Helen Rowell, has told the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services that the regulator has not directly considered that issue.
Under questioning by counsel assisting the Royal Commission, Michael Hodge QC, Rowell said that APRA had been monitoring what had been occurring with respect to the Australian Securities and Investments Commission’s actions with respect to fee for no service, but had not acted on its account.
“Has APRA never considered whether fee for no service contravened the sole purpose test,” Hodge asked.
Rowell responded that APRA was monitoring ASIC’s actions on the issue and might take action in the future.
Hodge asked whether there was any limit on the period within which APRA could take action for breaches of the sole purpose test.
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