Govt owes advisers certainty on super advice fees
ANALYSIS
If the Federal Government is fair dinkum about delivering affordable advice then it owes it to financial advisers to remove any legislative doubt about the payment of personal advice fees from members’ superannuation accounts.
Right now, the Government’s legislation delivering on the recommendations of the Quality of Advice Review (QAR) are, at best ambiguous, where super advice fees are concerned and open to being interpreted as a prohibition.
Thus, it is simply not good enough for the Assistant Treasurer and Minister for Financial Services, Stephen Jones, or the Treasury to point to adjusted wording the explanatory memorandum attaching to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 [Provisions] as sufficient.
The Financial Advice Association of Australia (FAAA), the Joint Licensees Group, the Stockbrokers and Investments Advisers Association (SIAA), the Law Council of Australia and the Financial Services (FSC) are all right to demand amending legislation.
Why? Because the history of the financial advice profession in Australia is littered with instances of regulations being overturned and of regulators such as the Australian Securities and Investments Commission (ASIC) changing personnel and deciding on expedient reinterpretations.
If the Government specially amends the legislation, then the status of superannuation advice fees will be black letter law and capable of common interpretation by those advising superannuation funds.
What was discovered during yesterday’s hearings of the Senate Economics Legislation Committee is that notwithstanding the assurances of the minister, the Treasury and the regulators, there is no common interpretation of the regime around superannuation advice fees.
In fact, the Association of Superannuation Funds of Australia (ASFA) chief executive, Mary Delahunty admitted that while some funds would be taking a risk-based approach involving occasional spot audits, others would be adopting a stricter approach based on guidance received from their financial advisers.
Underscoring all of this, was the submission from the Australian Law Reform Commission that Treasury’s tinkering reflected in Section 99FA simply does not achieve its stated policy intent of giving permission for superannuation trustees to pay advice fees on behalf of members.
If the Government is genuine in seeking to make financial advice more accessible and affordable it cannot leave the status of advice fees paid from superannuation in a legislative twilight zone.
Industry funds, ASIC and Treasury are waging war to defend the legislation for a reason. They are laying the groundwork for the next ‘fee-for-no-service’/change of interpretation/look back/adviser eradication campaign.
There is no other explanation for their defending of 99FA in its current form. All the industry are asking for is consistency in the law with ASIC’s stated interpretation and the explanatory memorandum.
ASIC are so determined to push the legislation through, they rushed out dubious research making all sorts of inflammatory claims about cold calling and accusing advisers of ripping off consumers with high fees; even though the report was lacking in details and in fact suggested the opposite was true for the vast majority.
This was followed by a bizzare industry fund press release, designed to influence politicians, containing outrageous and frankly false allegations toward our profession.
They want this legislation in its current form and they are fighting dirty to keep it. There is only one plausible reason for it.
Both this government and the previous one have shown they have no interest in making financial advice affordable and have an agenda to destroy financial planners. Given this no changes will be made. You wouldn’t wish this career on your worst enemy.