CFS reassures on adviser service fees via super
Colonial First State (CFS) has told financial advisers that while it supports maintenance of current arrangements, it will help them navigate any removal of tax credits on adviser service fees paid via superannuation.
CFS has issued a message to advisers in which it has acknowledged a recent update from the Australian Taxation Office (ATO) about its intention to not allow superannuation funds and investor-directed portfolio service (IDPS) operators to claim a reduced input tax credit on adviser service fees from 1 April, this year.
“This will mean, as of 1 March 2024 funds will no longer be able to apply GST RITC for ASFs,” it said. “While the fee charged by the adviser remains the same, the amount incurred by the member will increase by the RITC amount.”
CFS said it was working through the proposal and its effect on CFS products.
“We support the current arrangements and industry advocacy efforts to maintain these arrangements.”
However, it went on to say that should the industry’s efforts fail, CFS “is committed to assisting advisers and members in navigating this change”.
The ATO signalled its revised approach in early December telling superannuation funds that some long-standing practices around adviser service fee arrangements may not give rise to reduced input tax credits.
Despite having issued past binding private advice, the ATO now intends to hold firm to the position that if a superannuation fund does not actually receive the supply of the advice, it therefore does not make an acquisition on which it can recover goods and services tax (GST) or RITCs.
Even where some superannuation funds have received private rulings, the ATO has suggested they need to check whether that ruling remains valid.
Great way ATO / Canberra Regulators & Pollies to yet again attack Advisers.
I bet this will require new FDS & AFC for every client !!!!! All at same time.
Canberra morons Kill Advisers every way possible.
If it wasn’t so personal I’d almost be impressed at the way this Government keeps thinking up new ways to attack advisers and create an uneven playing field for the super funds. With this one, on top of lower levels of education and compliance, now super fund “advisers” will have the added benefit of claiming the RITC for an additional discount to their clients.
The Govt may as well just come out and say they’d like to outright ban independent financial advisers and rip the bandaid off. Vertical integration and product sales for all!
I think assisting advisers and members navigate this change is code for saying we’ll send out a confusingly worded letter to every member on the same day that suggests ringing their adviser to discuss it further
CFS and adviser advocacy are oxymorons.
Do as I have done $16.5 million withdrawals from CFS entirely no clients left in there!!
Take action they don’t give a crap about advisers!!