The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen and the Minister for Finance and Deregulation, Lindsay Tanner, today welcomed the release of Australian Securities and Investments Commission (ASIC) guidance and class order relief that will enable millions of Australians to access low-cost, simple advice on their superannuation investments.
The guidance package was developed by the year-long study of the Rudd Government's Financial Services Working Group (the Working Group).
To facilitate simple super advice ASIC's class order provides relief for superannuation trustees from the personal advice requirements of section 945A of the Corporations Act in limited circumstances.
ASIC has also released guidance setting out detailed, practical examples showing how superannuation funds can make simple advice available to their members under the current law.
"This represents a significant benefit for superannuation members who have not been able to get answers to basic questions about their retirement savings without having to pay for unnecessarily expensive advice while retaining adequate consumer protections," Minister Bowen said.
"Superannuation is the largest area of unmet need for financial advice, and the Government is determined to change this.
"This innovative solution will encourage superannuation trustees to engage more with their members and help them understand their superannuation investment."
Lindsay Tanner said that the Government had consulted closely with industry and consumer representatives in developing the guidance package.
"Through this guidance package the Rudd Government is delivering on its commitment to remove regulatory barriers and make it easier for millions of Australians to obtain inexpensive advice about their superannuation," Minister Tanner said.
"The package represents a practical solution that will work for industry without reducing consumer protection. The package will provide certainty for industry that it can confidently provide advice to its members on matters such as choosing between investment options, the best form of super contributions, or suitable levels of insurance."
For more information go to www.asic.gov.au.
9 July 2009
Attachment
Intra-fund advice
- Intra fund advice is advice that is given about a superannuation member's existing interests in a superannuation fund. It does not involve personal advice about any new interest that the member may wish to acquire in the superannuation fund or another superannuation fund or investment product.
- Access to simple advice about a superannuation member's existing interests in a superannuation fund has been a significant area of unmet need for financial advice in superannuation.
- ASIC's guidance and relief package makes it easier for superannuation funds and financial advisers to answer member inquiries directly by providing guidance about how to provide factual information, general and personal 'scaled' advice (advice that is limited in scope) to existing superannuation fund members.
- The Government has addressed these concerns and barriers by instructing the Financial Services Working Group to examine these issues and develop policy proposals to overcome them in order to improve Australians' access to basic financial advice within their superannuation fund.
- The Financial Services Working Group recommended that the regulatory barriers to the provision of simple superannuation advice were best addressed by ASIC issuing clarification via regulatory guidance and (where necessary) class order relief. Extensive confidential consultation was then undertaken by ASIC with industry to develop an ASIC guidance and relief package.
- A superannuation fund can only provide members with personal advice under this guidance and relief package if the superannuation fund holds Australian Financial Services Licence (AFSL) to provide personal advice.
- If a superannuation fund uses the guidance and relief to provide a member with intra fund advice, the superannuation fund must:
- Notify the member that they are relying on the relief to provide intra fund advice.
- Advise the member that the advice is limited in scope at the time of giving them the advice. In other words, the fund needs to explain why they are only considering the member's existing interests in the superannuation fund at the time of providing the advice.
- Where personal advice results in any increased fees, costs or charges, insurance premiums, or remuneration (including commissions), the member must be notified in writing in dollar amounts.