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Planning industry united on MySuper advice fees
The financial planning industry is forming a united front against the Government’s moves to ban the payment of advice fees from MySuper accounts.
Both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) have declared their opposition to the move which stems from the Government’s insistence on rubber-stamping the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The united approach comes against the background of a growing industry consensus that the Royal Commissioner, Kenneth Hayne, had failed to thoroughly understand superannuation-related advice including the status of intrafund advice.
The AFA’s formal position is expected to be made clear when it releases its submission to the Government’s proposal later today, but the organisation’s director of policy, Phil Anderson said that the AFA was strongly opposed to the ban on the payment of advice fees from MySuper accounts.
“And our opposition stems from the fact that members holding MySuper accounts are being treated as second-class members,” he said.
“They may want advice around account consolidation, salary sacrificing into super or transition to retirement but, unlike members of choice funds, they will either be denied access to advice or be forced to pay for it themselves,” Anderson said.
He said the alternative would be for them to roll out of the MySuper fund and establish a choice fund – something which could prove costly and not ideal,” he said.
The FPA chief executive, Dante De Gori, yesterday made clear his organisation’s opposition to the MySuper fees issue stating the FPA opposed the move because it would create two classes of superannuation and take away the ability for consumers to choose where they get advice and how they pay for it.
“It is incorrect to say that people with MySuper are disengaged and do not require advice,” De Gori said. “Many people choose to stay in a MySuper investment option because it is the right one for them and they have the same need for financial advice on their superannuation, insurance needs and retirement planning.”
“Stopping the payment of advice fees from MySuper investment options will disadvantage many Australians who currently use this arrangement to access affordable advice from their choice of financial planner.”
Both the FPA and AFA are expected to urge their members to lobby individual members of Parliament to point out the deficits of the MySuper move and the problems it is likely to generate for MySuper members as they move closer to retirement and have a greater need for advice.
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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.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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