The shift to the MySuper regime may result in hundreds of employer funds being forced to go to market to seek member support services as current advisers were sidelined by regulation.
Corporate Superannuation Specialists Association (CSSA) president Douglas Latto said planners offering advice in this space were caught between legislation requiring them to give statements of advice and further legislation that said fees received from fund administrators were conflicts.
“Corporate funds have realised there are a lot of services we provide, such as policy meetings, seminars, education to members, and if we are not going to do that who is going to?”
“It is very hard for corporate super funds to adopt a model for direct serving, there are just too many funds out there, and so these outsourced arrangements are not advice but services that we deliver.”
Speaking at the Association of Financial Advisers National Conference in Cairns, Latto said those providing advice were caught between the legislation around advice and the changes to be enacted by MySuper.
“If you do give a tender, you have to give a statement of advice as the employer is a retail client under the legislation,” Latto said,
“The Australian Securities and Investments Commission has considered us to be conflicted if we do that and subsequently receive outsourced payments from providers despite best interest duty.”
“We are in difficult hiatus period and if the default super scenario ends up that an employer cannot use a current fund and they have to go out to market there will be thousands of employers having to do that.”
“While these things have made it hard for us to provide services the government has not provided an alternative course of action.”
