In its submission to the government’s consultation around the retirement income covenant, TAL said it was “vital that regulatory support is provided to the expansion of the intra-fund advice regime” alongside the commencement of the covenant, and that this should not be delayed until after the Quality of Advice review, currently slated for 2022.
The comments come after similar calls from the Australian Institute of Super Trustees, with the industry body recommending the government bring forward its advice review with a view to extending the intra-fund advice regime before the covenant legislation is passed.
Off the back of Westpac being fined $10.5 million this week for breaches of personal advice laws by its call centre staff relating to just 14 fund members, TAL pointed out that trustees were understandably nervous of giving any guidance to members around retirement strategy that could breach the line between general and personal advice.
“TAL notes that the [government’s] position paper positions retirement guidance as being a continuum, ranging from factual information through to personal financial advice. Parts of this continuum are currently subject to policy uncertainty plus challenge in the context of recent case law,” the submission said.
“Given the nuanced line between factual information and advice (general and personal) and legal risk arising from the possibility of crossing the line between what constitutes ‘personal’, as opposed to ‘general’ financial product advice, trustees are likely to approach the provision of guidance with considerable trepidation.”
The insurer noted that the current intra-fund advice framework was “highly limited in scope” and needed “some basic extensions”, including allowing funds to “guide and support members” on assets and income outside super to the extent they impacted pension eligibility, and also on the entire income needs of a household rather than an individual member.
“This approach would have dual benefits of helping funds better guide members to make effective decisions around their retirement plan, while also supporting the uptake of retirement income streams,” the submission stated.
Off the back of this potential expansion, TAL said it was worth considering whether trustees could charge members individually for intra-fund advice as they accessed it, rather than charging all members collectively.
“In the case of… costs borne by members individually, advice or guidance relating to the retirement income strategy of a household should be permitted to be funded from a single member account,” the insurer said.
If these default Super Fund Trustees sought annual opt ins & informed consent for the hundreds of millions they charge their members, then they should have no problem providing personal advice with all that money they are raking in.
Its high time to play on a level playing field, & some in Treasury know it (lets see what happens next year).
“…some in Treasury know it”…what do you mean by this Animal Farm?
exactly what I’m saying. Some in Treasury privately admit that Intra-fund “fees for no service” arrangement is entrenching a monopoly for large default funds (over their competitors). So if they don’t deal with this, there is serious issues from an ACCC competition perspective. The problem is who will win the debate internally.
ACCC letting industry funds break the law now by sharing money into industry fund add pool these are all competing super funds Australian super vs Hostplus vs Cbus they are in business against each other yet they are pooling money to advertise against other super funds “retail funds” this is the very definition of collusion we wont target your business if you don’t target ours but we will collectively target our other competition
Yes its astounding the ACCC let a cartel do this to an industry.
“In the case of… costs borne by members individually, advice or guidance relating to the retirement income strategy of a household should be permitted to be funded from a single member account,” the insurer said.
With the new fee structure, if i have a client with 3 funds i have to apportion my fees over the 3 accounts and not provide any advice that doesn’t relate to those accounts. I can’t even charge 1 of the funds, for admin ease, and advise across the 3 funds.
TAL should stick to insurance…oh they are…..Group Insurance inside super funds.
So TAL has had some pressure applied to it’s Group Insurance Arm.
It might help with the next tender if you could help us now….nudge nudge…wink wink
That makes a lot of sense.
Absolutely agreed, no more business for TAL, BT is already falling apart prior to the purchase and service standard is awful so much as I will never write BT again. TAL has got a cultural issue from long ago, will stay away from both providers
Well TAL has once again shown their true colours, it was one of the leaders in the push for the Life Insurance reforms, but told advisers that they were fighting for them, well they weren’t and they aren’t now, like other major insurers (AIA) they want the non aligned advisers out of the industry, and once this is achieved they can go back to their prefered business model “EMPLOYED SALESPERSONS” “ROBO” or “DIRECT”.
This is like giving a carve out to Pharmacists to provide medical advice, so people can bypass their GP who is actually the one qualified for the job. What a mess!
Except pharmacists are generally more caring and take more time to ask about your issue than any punchclock GP who can’t wait to throw you out after 15 minutes.
I am not giving TAL any more business. Disgusting.
Vested self interests alive and well. That nasty best interests duty where you need to consider the clients interests ahead of your own really gets in the way, doesn’t it?
Clearly, with the purchase of BT’s life insurance business, TAL thinks they are big enough to do … WHAT?
I didn’t know that TAL was on the same page as unions, the people least in favour of their members receiving [i]independent[/i] financial advice.
This is genuinely weird.
Is there hope that they can sell larger policies to individuals via intra-fund advice? Are they preparing for a post-financial adviser future?
Yup no more business for TAL from me – not that they got much anyway…
Way to go TAL. Actively lobby against financial advisers; you know, the people who give you business.
You are kidding me TAL….obviously you are too close to the Industry Fund network, via your Group Insurance offering, and trying to support them in providing the type of advice which requires us mug licenced Advisers to provide a full SOA. The gap widens further and Advisers are further marginalised in the process!!
No more crave outs. they need to see a financial planner…