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Super fund offers made to employers as default fund allowed
The hawking of superannuation products does not count if a super fund is offered to an employer to discuss the employer’s choice of default fund for employees who do not nominate a fund to receive payments.
The Australian Securities and Investments Commission’s (ASIC’s) regulatory guide on the hawking prohibition regime, which is to commence on 5 October, said the prohibition applied only to offers that were made to a retail client.
“Although employers are generally considered to be retail clients within the meaning of the Corporations Act, employers do not typically acquire an interest in the fund,” the guide said.
“An employer selecting a superannuation fund as a default fund does not constitute the issue or sale of a financial product to that employer.”
The prohibition also did not apply to offers made in the course of giving personal financial advice made in the client’s best interest.
However, consent was required when a consumer was offered, invited, or requested to apply for a different class of superannuation fund to which they already held.
“We will consider the contact to have been unsolicited unless consent was given in relation to the offer or invitation for that new beneficial interest,” ASIC said.
“If a consumer has consented to be contacted about the issue or sale of superannuation generally, a superannuation trustee can discuss both MySuper and choice products. However, if the consumer’s consent only reasonably applies to one class of beneficial interest, the trustee cannot make an offer, request, or invitation to apply in relation to a different class.
“Although consumers are unlikely to ask about MySuper products by name, they may ask about products with characteristics that MySuper products exhibit such as a ‘low cost’ product or the ‘default’ product.”
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