Complex advice referrals duty recommended

Mike Taylor

Managing Editor and Publisher

13 May 2025

Superannuation funds would have a duty to refer members to financial advisers for more complex financial advice when necessary, under a proposals being recommended to Treasury by major accounting group, CPA Australia.

Responding to the Government’s second tranche DBFO exposure draft legislation, CPA Australia is arguing that such a duty imposed on super fund trustees would help ensure members receive comprehensive and tailored advice, safeguarding their financial wellbeing.

The CPA Australia response has acknowledged some the benefits likely to flow from adding additional areas of advice to those which can be collectively charged but warned that one size cannot fit all.

Discussing the increased range of advice issues about which super funds can offer, submission made clear that the need to distinguish between simple and complex advice.

“For some Australians, in particular those for whom full qualification for the Age Pension is not in doubt, or where the likelihood of any amount of partial eligibility is remote, this has the potential to greatly simplify the advice process for Australians who just need relatively simple financial product advice around retirement income products and their features,” it said.

“However, given the complexity of retirement income advice, and the reality that most Australians will continue to need advice which assesses current or future part pension eligibility, we are unable to recommend the extension of intrafund advice to cover retirement income products,” the CPA Australia response said.

“Assessing and advising on retirement income requires highly specialised knowledge and a detailed understanding of each member’s unique financial situation both inside and outside of superannuation. Extending intrafund advice to include these products could lead to inadequate or inappropriate advice, potentially jeopardising members’ financial security in retirement. Therefore, it is essential to maintain a clear distinction between general superannuation advice and the more complex, personalised advice needed for retirement income planning,” it said.

“We also recommend that the relief contained in the proposed regulations be coupled with a duty on trustees to refer members to financial advisers who can provide more complex advice if such a need is identified. This referral should be required to occur when a trustee is reasonably aware that there may be member detriment if only the limited advice services under this proposal are provided.

“By establishing this threshold, trustees can ensure that members receive the comprehensive and tailored advice necessary to address their unique financial situations, thereby safeguarding their financial wellbeing and preventing potential adverse outcomes. Such a duty should be accompanied by standards specified in the fund’s retirement income strategy.”