The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Last month, responding to the Quality of Advice (QAR) legislation announced on 27 March, the Financial Advice Association Australia (FAAA) drew attention to recommendation 7, which outlines revised requirements for superannuation fund trustees processing financial advice fees.
Namely, the legislation sets out several requirements that need to be satisfied before a trustee can charge the cost of advice against the member’s interest in the fund.
Among the requirements is an assurance of an unspecified kind that the financial product advice is personal advice and is wholly or partly about the member’s interest in the fund and that the amount charged does not exceed the cost of providing financial product advice about the member’s interest in the fund.
At the time, the FAAA’s chief executive Sarah Abood explained this legislative addition puts specific obligations on super fund trustees before advice fees can be paid, without any clarity.
Now, as part of the JAWG, which also includes the accounting bodies and the FSC in its ranks, the FAAA has intensified its plea to the government regarding recommendation 7.
In a statement issued on Monday, the group argues that under the government’s proposed Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024, consumers will face more red tape when it comes to setting up an ongoing adviser arrangement with superannuation trustees to pay for advice, with no additional consumer protections.
“Under the proposed legislation, superannuation trustees that allow fee deductions will need to check every piece of advice individually and duplicate valid checks already undertaken by financial advisers and their licensees,” the JAWG said.
“Professional advisers, superannuation trustees and advice licensees have consistently provided the government with suggestions to reduce red tape, make it easier for consumers to access affordable advice, and remove duplication in the adviser fee deduction processes for consumers, advisers, licensees, superannuation funds and their trustees.
“JAWG understands this is a technical area that is hard to get right and is ready to work with the government to get the best outcome for consumers.”
As such, the JAWG demands the government make “urgent changes” to the legislation to make advice more accessible and affordable to consumers to provide a way forward that is not unworkable and worse for all than the current situation at law.
Super Review understands that superannuation funds, like the advice profession, are perplexed by the government’s legislative inclusion. According to reports, they too believe that this inclusion in the final legislation will increase red tape, adding to the cost of advice and ultimately contributing to poor consumer outcomes.
