FAAA urges reversal of ASIC’s approach on intrafund advice

Mike Taylor

Managing Editor and Publisher

8 May 2025

The Financial Advice Association of Australia (FAAA) is urging a reversal of a recent Australian Securities and Investments Commission (ASIC) decision so that superannuation fund members have full visibility of the cost of providing intra-fund advice.

At the same time as opposing collective charging for the delivery of retirement planning advice, the FAAA has told Treasury that it wants full visibility of the costs being imposed on super fund members to provide advice.

What is more, the FAAA wants ASIC’s oversight of intra-fund or collective charging advice to be allocated to the superannuation funds sector of the purposes of ASIC levy.

“The cost of providing retirement planning advice will significantly increase the cost of running an intra-fund advice business, with flow on consequences for all members of the fund,” it said. “This will result in significant cross subsidisation within the fund with younger members paying for the personal retirement planning advice of older members.”

“Collective charging for retirement advice should not be permitted, because it will require many members to pay for a service which they have no potential to benefit from for many years,” it said.

The FAAA also pointed out that members who had already paid for their own financial advice should not be expected to pay for the provision of retirement planning advice to other members of the fund via collective charging.

“That is a form of double charging and quite unreasonable,” it said.

“Previously, the cost of intra-fund advice was separately disclosed to members of super funds. In recent years, ASIC removed this obligation from super funds. In the context of the potential broadening of the scope of advice that can be provided through a collective charging model, we recommend that the separate disclosure of the cost of intra-fund advice should be reintroduced,” the FAAA said.

“It would be beneficial for members to understand how much the fund is spending on financial advice being provided at no direct cost to the advised members, and this might prompt them to seek intra-fund advice themselves.

“We also recommend that super funds should publicly disclose each year the number of members accessing intra-fund advice, including the types of advice being provided and the cost of this advice,” the FAAA said.

“Finally, we suggest that the cost of any oversight by ASIC of the intra-fund or collective charging advice businesses, should be allocated to super funds for the purposes of the ASIC funding levy, not to financial advisers. It is unreasonable for financial advisers to pay for this activity, which only happens as a result of regulatory relief offered to super funds,” it said.