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FPA's Bloch responds to ASFA advice request
Financial Planning Association (FPA) chief executive Jo-Anne Bloch has given in-principle support to the Association of Superannuation Funds of Australia’s (ASFA’s) calls for flexibility around providing advice to super fund members in the current environment, but Bloch’s support does come with conditions.
ASFA chief executive Pauline Vamos said earlier this week that the industry body is discussing the impacts of the current financial crisis with the Australian Securities and Investments Commission (ASIC) in regards to more flexibility around providing advice to members.
ASFA has asked ASIC for a no action decision “so that we can actually advise during this time without being caught by implied advice”, Vamos said.
Bloch said she would support the move “so long as the people giving the advice were appropriately competent to do so”.
“I would hate super funds to start employing a whole range of different people and sitting them on the phones and having them answer questions without being appropriately qualified,” Bloch said.
“But I think it’s a great idea, if they are appropriately qualified.”
Bloch said ‘appropriate qualifications’ would include being RG 146 compliant as well as holding a Diploma of Financial Services.
Vamos said relief from ASIC would allow funds to ask members if they understood the consequences of transferring or cashing out their super benefits in the current environment. Vamos said super funds do not wish to make recommendations, but rather provide tax advice and information about the benefits of staying in super for the long term.
Vamos said the regulators, government and ASFA are monitoring the situation and any action is being taken “tentatively and slowly” to avoid rash decisions.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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