Super funds want consistency on advice fee consents

Superannuation fund members should only have to deal with one document when dealing with the costs of financial advice provided via their fund, according to the Association of Superannuation Funds of Australia (ASFA).

In a submission responding the Australian Securities and Investment Commission (ASIC) on advice fee consents, ASFA said it considered that the fee disclosure statement (FDS) and consent should be together when considered by the account holder.

“This will ensure that the account holder has the required information about the services they are entitled to receive under the arrangement,” it said. “Some additional information that could also be included is if services had been provided by the fee recipient previously, the consent form should provide confirmation that services had been provided to the account holder for that period.”

The submission also backed a prescriptive approach for financial advisers receiving a fee via superannuation funds.

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“ASFA notes that ASIC is striving for a balance between prescriptive standards and providing flexibility for fee recipients. Superannuation funds, as account providers, need to build systems and processes to ensure that the consent received from the fee recipient meets all the requirements,” it said.

“If the form of these consents differs between each fee recipient, this could create significant compliance and administrative costs for superannuation funds. ASFA recommends a more prescriptive approach be used to determine exactly what must be included in a consent to ensure it is as consistent as possible between fee recipients, creating administrative and compliance efficiencies for account providers when processing these forms.”

“Consistency between consent forms is likely to decrease the need for manual interventions and contact with the fee recipient, increasing administrative efficiency for the fee recipient as well. Part of the prescriptive approach could include, for example, a prescribed list of services that will be provided by the fee recipient.”