Industry funds suggest advice ‘prohibited list’
Industry superannuation funds have told the Treasury they would accept a “prohibited list” covering the areas of financial advice which must be excluded from collective charging.
In doing so, the funds have suggested such a list should include:
- ongoing financial advice service arrangements;
- advice for a non-member spouse (provided this prohibition does not extend to ‘incidental’ or household-level advice where that is appropriate);
- the transfer (in whole or part) of an existing super account balance from one super fund to another super fund; or
- the redirection of future contributions away from one super fund to another super fund.
The Australian Institute of Superannuation Trustees (AIST) said it believed that consumer protections would be significantly improved by specifically identifying the types of advice that are excluded from collective charging.
“The prohibited list has been drafted to provide appropriate guardrails to ensure advice provided by super funds and collectively charged aligns with the best financial interests of all members,” the submission said.
“It lists the types of advice taken advantage of by bad actors, as identified by the Financial Services Royal Commission and ASIC. Inappropriate switching advice in particular has been identified as an area where there has been significant misconduct by retail funds.”
“This approach is aligned with proposed reforms that open up advice to members provided by super funds, aligned with the objectives of more advice to more members, in an accessible and affordable way.”
“As a consequence, member outcomes will be improved. For example, members approaching retirement will get greater certainty about their retirement options and outcomes when their broader financial and family circumstances are considered.”
“AIST submits that further consultation is required in relation to any statement about the basis upon which trustees may collectively charge for personal advice to members, including the meaning of simple and ongoing advice.”
Since they admit that they shouldn’t advise members to switch funds, they should be banned from encouraging that to happen with a “click here to consolidate your funds” button on their websites.
100%. How many clients have lost their insurance cover or tax deduction by clicking on that lost super button thinking it would not include their $500k retail super account. How this is legal beggars belief.
Self serving nonsense. Retirement advice is a dangerous area for untrained call centre jockeys to be dishing out advice, but this is what we will soon be seeing.
Absolutely self serving. They would accept a list?? Really?? Who wrote this list? I wonder???
Besides the Industry Super already give huge amounts of all manner of Advice, paid for by HIDDEN COMMIONS / Collective Charging with zero compliance.
It will now be Govt approved & promoted = RC 2.0
And:
Given most of the people getting so called Advice will be around retirement age, it will be the young mostly paying HIDDEN COMMISSIONS FOR NO SERVICE for the older Boomers to get Free Advice.
Another Massive Wealth Transfer issue promoted by Canberra.
Please explain what hidden commissions you’re talking about…… i’ll wait.
Industry Super Funds charge EVERY member HIDDEN COMMISSIONS / Additional Admin Fees to pay for their Financial Advisers that mostly provide so called Free Advice / Intra Fund Advice.
Of course nothing in life is Free.
How do you think Industry Super Funds pay for their Advisers ? ISF Advisers DO NOT work as volunteers.
And if QAR expanded Advice / Sales Advice / Intra Fund Advice is legislated then the cost of these HIDDEN COMMISSIONS / Additional Admin Fees will continue to increase.
Members of Industry Super CANNOT Opt out of these HIDDEN COMMISSIONS.
Members of Industry Super HAVE NOT Opted In / Provided Annual Consent for these HIDDEN COMMISSIONS.
Members of Industry Super ARE NOT Informed of the Costs of these HIDDEN COMMISSIONS they ALL Pay.
Hope that helps explain.
Plus all the money they give to the unions and what they spend on TV adds like compare the pair To advertise on commercial television is costing millions as well
How are these things in the members best interest
Ha Ha Ha Ha – you must work for an Industry Fund or ASIC with that ridiculous comment mate.
This one is easy. Industry life policies which are automatically included in most cases are much poorer quality than retail policies. They are the same or even MORE expensive than retail policies when the servicing advisers receives 100% commission on the retail product. So we have lower quality for higher price. The union fund trustee is therefore incompetent at their job as they are getting screwed by the insurers and reinsurers at the cost of their members to whom they own a fiduciary duty, or they are ripping off the members. You may not remember but there was also the fund that kept the life claim of a deceased member and refused to pay the parents of the deceased (intestacy laws NSW) as the member had rolled out most of their benefits to fund a property in an SMSF and the trustee requirement to pay the benefit was “discretionary” to the trustee. This was in SMH prior to the RC but nothing to see here. They essentially stole the life benefit payment from the family of the deceased. They also charge fees for no service and charge dead people. Also not allowable since the RC unless you are an industry fund.
Wow! – how arrogant, Industry Funds are now trying to influence Corps Law and advice legislation for a carve out. Yeah not surprised one bit.
They are arrogant because traditionally it has worked. It will work again this time because Jimmy Chalmers and Stephen Jones don’t want to upset them. The RC was a classic example of Industry Super getting a free pass and that was when the political party that didn’t like them was in power. Do you really think the ALP won’t do what they are told by the money that helped them get elected?
Industry Super funds don’t “suggest” anything to lawmakers they are the Law. The Australian Treasurer and Finance Ministers also directly report to Industry Super funds…At least we’ve got some clarity now on the direction of Advice in Australia.
It blows my mind how the Industry Super funds here with the Treasurer and the current Government in their pocket arrogantly want to Cherry pick the Corporations Laws so they are able to provide Personal Retirement Financial Advice without a licence.
Industry Funds are just Super Funds. They aren’t professional advisers and should never be given this status. It’s the biggest conflict of interest this country has ever seen.
Are you people serious!!!!
QAR is simply a Trojan horse for conflicted vertically integrated managed funds (i.e.Industry Funds) to keep their Monopoly over not only the Trillion plus dollars of Australian Superannuation savings, but also the Advice Industry. Let’s just let these monopolies play both sides of the fence, and completely forget that the Royal Commission which the Industry Funds also ran was used to eliminate the banks, major retail advice providers, & major insurers by these same monopolies.
Now their target is the remaining professional advisers. They want to carve out tick a box retirement and advice solutions, and get paid for it.
Get paid to simply force the retention of their own clients to their own funds.
It beggars belief???
The consumer needs to be aware of this major conflict of interest when you get corrupted advice from a fund that will never recommend you change providers even if it’s in your best interest. Will Australian Super recommend you move to CBus or HESTA, or god forbid a fund outside of the Industry Fund Cartels?
No of course they won’t.
So tell us treasurer how do you plan to deal with this massive conflict of interest???
Awaiting your response with baited breath.
He (The Treasurer) reports directly to Industry Super funds…It’s not a conflict it’s corruption.
Let’s add to the prohibited list -‘vertically integrated managed fund monopolies’, and ‘industry funds allowing layman to offer retirement advice to retain their own membership’ , & ‘allowing conflicted fund managers to double-dip on every client they have with across the board hidden fees, by calling this retention program ‘retirement advice’. It will never be unconflicted, or professional retirement advice with the conflict of interest it represents. Royal Commission 2.0 here we come. This one will only be focussed on the Industry Funds this time for ripping off consumers, charging an across the board fee for no real service or advice.
You people are out of your minds and drunk on your own power.
Estate planning implications, centrelink, asset protection, reverse mortgages, aged care???
They want the advice equivalent of being half pregnant, it makes no sense.
We need a solution for these people (fund members) but this is NOT it. Michelle tried hard but was either complicit or ignorant of the totality of the implications of the QAR.
Once again hand it to the union funds they’ve got this one wrapped up nice and tidy for themselves.
One thing the union movement is good at is organising a racket. Much like the mafia really.