At a parliamentary joint committee on corporations and financial services hearing earlier this week, senator Andrew Bragg noted commissioner Hayne’s view of intra-fund advice as being:
“…the provision of advice that is not personal advice, to members of a particular fund about their interest in the fund, where the cost of the advice is charged collectively to members of the fund in accordance with the SIS Act.”
Senator Bragg asked ASIC commissioner Danielle Press whether the corporate regulator shared commissioner Hayne’s view.
“Intra-fund advice is personal advice, but it is actually undefined. There is a section of the SIS Act that allows funds to cross-subsidise certain parts of advice,” Ms Press told Senator Bragg.
“That’s not what Hayne said,” Senator Bragg responded.
“By law it’s personal advice. It takes into consideration your personal circumstances, but it is allowed to be cross-subsidised by the SIS Act under 99F,” Ms Press replied.
Senator Bragg noted to Ms Press that the proposal within the Hayne commission to effectively stop the deduction of advice fees from superannuation accounts is partly based on the rationale that intra-fund advice is not personal advice.
He then asked Ms Press whether she had any other views on commissioner Hayne’s rationale.
“No, I don’t think so. I think at the end of the day it was a recommendation of commissioner Hayne and it’s a matter government,” Ms Press said.
ASIC’s comments come as a Roxburgh Securities director Steve Blizard wrote a letter to Prime Minister Scott Morrison dated 30 October urging for a “major overhaul” of legislation around intra-fund advice.
“It is almost like there is a cone of silence that exists around intra-fund advice. Since Labor introduced these various laws in 2013, the industry super funds have continued to grow, while their competitors have been attacked through strident media campaigns, or through the assistance of pro-industry fund journalists and book authors,” Mr Blizard wrote.
There are words that a less charitable adviser may use for Hayne. These descriptive terms will make sense to anyone who ‘enjoyed’ his appearance at the Royal Commission (it was more an appearance than chairing it). These terms are: elitist, arrogant, myopic, unwilling to learn, closed minded oh, and did I mention arrogant. Each word was more than adequately supported by numerous examples throughout the farce. At one point he made clear comments how he didn’t think insurance should be marketed and that if people wanted it they would seek it out. Mind-boggling how such a creature was chosen to chair this important event. He could not have been LESS qualified to sit there pontificating on such matters.
WOW Danielle Press just confessed she doesn’t know the law and also ASIC have been allowing for Super funds to charge for advice the fact that it says personal advice through out this document “section 99D” under the guise of “General Advice”
Intra fund advice works the same way advisers were being paid for until commissions were stopped.
Section 99D prohibits the trustee from including ‘in any fee charged to any member of the fund an amount that relates to costs incurred by any person, directly or indirectly, in relation to personal advice provided by any person to an employer of one or more members of the fund’. Section 99F prohibits the trustee or the trustees of a regulated superannuation entity from directly or indirectly passing on the cost of providing [personal] financial product advice in relation to a member of the fund on to any other member of the fund, to the extent that the advice is provided by the trustee or another person acting as an employee of, or under an arrangement with, the trustee in prescribed circumstances.
The RSE licensee may collectively charge for personal advice where the advice is not ongoing and does not fall within one of the prohibitions in s 99F of the SIS Act. ASIC says that ‘the types of advice for which a superannuation trustee is likely to be allowed to collectively charge, where the advice is not ongoing, include advice to a member about:
• the extent of cover provided by the insurance arrangements that apply to the member’s interest in the fund and the types of cover that may be suitable for them
• increasing contributions, and
• changing investment options within a fund.
RSE licensees may not collectively charge members for various types of personal advice, including advice that is likely to be more complex and ongoing in nature, as set out in s 99F of the SIS Act. The cost of this advice must be borne directly by the recipient. This includes personal advice that is given in one or more of the following circumstances:
Remind me again, how was Hayne competent and qualified to head up the RC given how many parts of financial services he had no knowledge, experience or competence in?
shhhhh… the silence is deafening from the industry funds
maybe just maybe the RC and ASIC will be held accountable for shutting down an AFSL of over 400 advisers….I won’t hold my breath though!
“why not litigate?”…isn’t that ASIC’s current catchcry that applies to any form of error we make, so should Mr Hayne suffer the same fate for his misleading and erroneous statement. Maybe he might discover perfection amongst the human race is not possible.
[quote=Bobby ]we want fair play. everyone needs to be mired in red tape.[/quote][quote=Bobby ]we want fair play. everyone needs to be mired in red tape.[/quote]
bobby said it first, bobby said it best. the rest is history.
just a dirty back room deal… these politicians/industry/big corporates just disgust me. The pain being felt across small financial planning businesses is immense.. they should all hang there pathetic heads in shame
Maybe Ms Press can bring some hard nose Productivity Commission sense to ASIC. All advice has to be PERSONAL ADVICE. ASIC believes an approved script in a bank call centre can stop GENERAL ADVICE crossing the boundary to PERSONAL ADVICE. That is just fairy dust – as an ex ASIC employee told me “ASIC are not commercial” A call centre operator is on a bonus for a sale, and as seen and heard at the RC, money talks
The ISN funds got a free kick from their mates from Labor. Worse still, ALL ISN fund members are subsidizing the very few who see an adviser. No “fees for no advice” there, of course.
For heavens sake ASIC, eliminate GENERAL ADVICE – it has always been rorted!
So Intra Fund Advice is personal advice, just with Zero AFSL compliance and No Best Interest Duty.
And paid for by undisclosed commissions that are charged to 90% of Industry Fund Members who don’t use the service.
Sounds completely fair!!!!
HOW THE FREAKING HELL can our industry be so out of kilter for a level playing field.
So even the Royal Commissioner doesn’t understand the rules. What does that say?
sounds like fee for no service
Gosh! Was this the ONLY error in Haynes report that ASIC could find…they certainly haven’t looked too hard….
Wow, the regulator just might be setting a level playing field and show Hayne for what he is- misinformed, and with a bias.
we want fair play. everyone needs to be mired in red tape.