Addressing the ASFA virtual conference on Thursday, Aware Super group executive for advice Sarah Forman said the fund was urging the regulator to extend what was possible to in-house advisers when providing intra-fund services.
“Through the CP 332 submissions our fund, like others in the industry, has advocated for some expansion of what can be provided in that model,” Ms Forman said.
“There’s a lack of clarity and licensees are erring on the side of caution [regarding] conversations around Centrelink entitlements and talking about a complete household income for retirement planning. More people need to have the conversation around what’s available to them beyond the funds they’re in today to help them with their retirement.”
Ms Forman said as the cost of personal advice rose and more retail advisers exited the industry, it was important for fund members to be able to access a low-cost middle ground between general and comprehensive advice.
“We see intra-fund advice as the accessible way for members to access a level of advice that’s affordable to them. Members of our fund cover a divergent part of the community – teachers, nurses, emergency and government workers,” she said.
“Where we see the advice industry contracting back and numbers shrinking, those that remain are going ‘the only way I can be viable is to service high-net-worth [clients]’.
“We also want people to be able to get information if they want to self-direct, and the extent of that is taking them to tools that enable them to explore scenarios and lead them to become more informed.
“It’s hard to transition from that to an offer that doesn’t have a big price tag on it, because the limitations of intra-fund advice means you tip from ‘I’m playing around and I just wanted to clarify a couple of things’ to ‘now I’m into fee-paying advice’.”
With the number of consumers interested in advice having tripled from 2015 to 2020, but most still not willing to pay more than $1,000, Link Advice chief executive Duncan McPherson said intra-fund could play a key role in introducing more consumers to the idea of advice and its value.
“The role intra fund plays in helping someone understand that little bit more. General advice has a role to play because some people are happy to understand something and then they’re happy to go off and do it themselves,” Mr McPherson said.
“Funds have a good trust level with members and the ecosystem to be able to respond to those questions – the easier we make that, the more people will have circumstances in the future that want to engage with advice more deeply. Not everyone is going to go to [an adviser], but we want the right people to go and benefit from it.”
Can i too have my cake and eat it as well? Come on this is now getting into crazy town.
Evidently Ms Forman does not understand the interplay between advice cost and compliance requirements. How very odd.
Clearly best interest duty and the FASEA will mean one thing for one group of advisers and something completely different for another. What we’ve done is shifted the sale of products from face to face via Banks to a call centre boiler rooms with Super funds. The word “advice” being used to shift/sell more products. FPA silent.
I would like to see FASEA re-written with an example where an Super fund Adviser declines advice referring a client to a holistic adviser, with the need for an ongoing relationship.
Perhaps someone could also explain why the disclosure of fees has been silently swept under the rug when I assume there was plenty of advisers guilty of moving clients out of super funds to higher paying fees funds when those industry funds are now more expensive.
Intra Fund advice, what a joke. ASIC please, one playing field for consumers, advisers and regulators.
https://www.ifa.com.au/news/28430-asic-launches-civil-proceedings-against-stateplus-super
so will aware super and the like advise on lifetime annuities next? isn’t this an example of personal advice or default advice? I’m not sure opportunities will be passed onto their members (hello best interests). I will be watching the govt and regulator’s position here on what is advice and what isn’t, and if they care about benefits v advice, not just cost savings ..
Intra-fund advice should mean just that – advice that relates to the member’s super fund only.
It is so frustrating and soul-destroying having to work under such an unfair model. After all the crap that we’ve had to deal with (and continue to deal with) the one thing that really grates me is the fact that we have what appears to be a corrupt regulator.
We pay good money to be licensed only to have a biased /corrupt regulator turn a blind eye to the blatant conflicted advice that many super funds provide.
How is this even allowed to happen?
It is very frustrating and blatantly corrupt.
Who polices ASIC or are they a law unto themselves?
well said agree 110%…..and why isn’t groups like the FPA speaking out against this. Oh wait there getting payments from AwareSuper and a list of advisers with membership paid via one single cheque.
Is this a joke! Financial advisers desperately need a leader to rally the troops as we’ve all had enough. Not sure who that leader is but we need to all work as one.
Lets have the conflicted, less experienced, non business owning advisers give less compliant advice whilst the others, experienced, established, successful and proven advisers, shuffle unnecessary mountains of paperwork.
https://www.ifa.com.au/editorial/27361-why-am-i-paying-a-fee-for-no-service
And so the steady move to personal advice under the guise of intra-fund advice continues . So tell me why this isn’t conflicted when old Joe rings his super fund and is dissuaded from cashing out his super to fund an aged care place for his Mrs but is talked into a Pension Loan Scheme debt instead ? All part of “Pension advice” of course – but keeps the industry super fund’s FUM in tact. Conflicted advice is conflicted advice, whenever there’s a revenue link to a product.
MySuper Fund members paying ongoing intra-fund advice fees are not required to provide informed consent or ongoing fee agreements for the personal advice fees they pay every month. For many millions of default super fund members, intra-fund advice costs buried within the product manufacturer’s fund amounts to paying fees for no service. Collective fees should not be charged to Default Super Fund members unless the Fund Trustee obtains annual consent for these advice fees charged from their fund, so long as annual fee consent is required of retail advisers. Fix up the highly discriminatory playing field against retail advisers, & then we can discuss who is advising on what.
So in other words, let’s allow the most conflicted financial advisers, who are employed by product manufacturers primarily to attract and retain FUM, who deduct fees from members who don’t use their service without their permission, to operate with less consumer protections and red-tape than independent financial advisers. Yeah right. But given ASIC’s appalling track record of ignorance and bias towards industry funds, this is exactly what they will allow, and that letter ASIC and APRA jointly sent to super funds last year warning about the Sole Purpose Test, I’m guessing that won’t apply to their industry fund mates.
Sounds like they want to give financial advice without all the pesky regulations applied to the rest of adviser world…
So everyone in the fund pays the fund a percentage of their balance for availability of an advice service. They may not use it every year , or very often, but know someone is there to help them when they need it…..that sounds a good system but it sounds familiar. THATS RIGHT…..ITS WHAT EMPLOYED AND SELF EMPLOYED PLANNERS USED TO HAVE AND FASEA, FOFA AND THE RC OUTLAWED. Go figure??????????