The Federal Government has been questioned about whether superannuation funds will need to be registered to provide taxation advice or related financial product advice under the Treasury's amendments to the Tax Agent Services Act.
In a submission to the Treasury dealing with the proposed changes, the Association of Superannuation Funds of Australia (ASFA) highlighted that superannuation funds were already providing tax-related and financial product advice, and the cost was being amortised across fund memberships.
It argued that clarity was needed around whether registration was required "where access to financial advice is a benefit of fund membership and is not separately charged for".
The ASFA submission said the new legislative framework operated by requiring entities that provided tax agent services for fees or other rewards to be registered if they were to avoid the potential civil penalties, with tax agent services being defined as including tax advice (financial product) services.
"Within the superannuation industry it is reasonably common for funds to provide financial advice (including subject matter that will be covered by tax advice (financial product) services) to fund members without charge," the submission said.
"Effectively the provision of the advice is a benefit of membership, with the cost of providing the service regarded as a general cost of fund administration. As such, the cost is recovered from administration fees that are charged to all members, whether or not they avail themselves of the service," it said.
It was unclear whether, under such an arrangement, a trustee of a superannuation fund would be required to be registered, the submission said.
On this basis ASFA recommended that clarification be provided in the [legislation's] explanatory memorandum "as to the applicability of registration requirements to situations in the superannuation industry where access to financial advice is a benefit of fund membership and is not separately charged for".
