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Intra-fund advice is not special says ASIC
Critics are wrong when they suggest that intra-fund advice is held to less demanding standards than other forms of personal advice, according to the Australian Securities and Investments Commission (ASIC).
In an article published on its website and in an Association of Superannuation Funds of Australia (ASFA) publication, ASIC has insisted that financial advisers giving intra-fund advice must comply with the full range of consumer protection requirements in the Corporations Act.
ASIC’s explanation of the standing of intra-fund advice has been delivered at the same time as it has confirmed it is currently finalising a review of a sample of intra-fund advice provided earlier this year, after the start of the COVID-19 pandemic.
“ASIC holds intra-fund advice to the same standards and stringent rules as other personal advice. Accordingly, financial advisers must act in the best interests of their client and comply with related obligations, regardless of whether they are providing intra-fund advice or other personal advice,” the regulator said.
“Many Australians don’t know how their superannuation fund can help them. Trustees offering personal intra-fund advice can help their members by clearly explaining what advice is provided at no individual cost.
“ASIC expects advisers providing intra-fund advice to clearly explain that the advice is limited to certain topics about the member’s superannuation. Where a member’s personal circumstances require advice beyond the scope of intra-fund advice, advisers should let them know what options they have for seeking comprehensive financial advice.”
“Advice providers must also exercise their judgement in appropriately scoping the advice they provide. If they cannot act in the best interests of the member due to the limitations of intra-fund advice, they should not provide the advice. Instead, they should refer the member elsewhere.”
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
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