Deduct advice costs from member interests

27 September 2022
| By Laura Dew |
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The cost for advice provided by superannuation funds, as proposed by the Quality of Advice Review, should be deducted from the member’s interest, according to the SMSF Association.

In its response to the Quality of Advice Review proposals paper, the SMSF Association said the growing size of the superannuation market in Australia necessitated advice for members.

“There is a growing level of interest in superannuation and with that an increased need for advice. This level of engagement should be encouraged and supported with quality information and advice.

“Advice needs to be accessible as and when members need it during their working life, not just in retirement. Allowing superannuation advice to be funded by their superannuation savings, ensures a greater level of accessibility to financial advice for many ordinary Australians.”

Regarding how it should be charged, the association felt the fee for the advice should be deducted from a member’s interest. This would also apply to members who had their own financial adviser to ensure equitable treatment for all members.

“Where specific advice is provided to a member, no matter how simple or complex, the fee for the service provided should be deducted from the member’s interest in the fund, or nominated interest where they have more than one superannuation interest with that trustee (e.g. a pension account and an accumulation account).

“Collective charging should apply only where it is in relation to the trustee discharging their duties under the retirement income covenant and for the provision of factual information to members.”

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