The results of ifa’s poll on the proposed changes to s99FA of the SIS Act has shown considerable concern over the prospect of super fund trustees reviewing SOAs.
In March, the government introduced to Parliament the first legislation coming out of the Quality of Advice Review (QAR).
Among the measures included in Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 was a change to the wording of section 99FA of the Superannuation Industry (Supervision) Act 1993 (SIS Act) that suggests trustees would be required to review clients’ statements of advice (SOA).
Speaking at an FAAA roadshow in Sydney earlier this month, chief executive Sarah Abood once again drew attention to the concerns around the amendments.
“There’s some concern that the new wording of this section, section 99FA, will require super trustees to audit every piece of financial advice where a consumer has asked the trustee to pay their advice fee,” Abood said.
“We don’t believe that that was the intent of the legislation. But we think it’s important that that be resolved because otherwise, we’ve got the issue that we might be robbing Peter to pay Paul here. That we’re saving red tape and cost in one area and we’re creating more somewhere else.”
Based on the results of ifa’s latest poll, this is a concern that is shared by an overwhelming majority of advisers who responded.
Asked whether they are concerned about super fund trustees being required to review SOAs, 86.2 per cent of the 217 respondents said they are, while just 11.5 per cent were unconcerned, and 2.3 per cent were unsure.
Also speaking at the FAAA Roadshow, ASIC commissioner Alan Kirkland assured that these concerns are unnecessary, and the corporate regulator does not see a need for superannuation trustees to verify every statement of advice.
“We’ve been trying to provide some early guidance in relation to the issue … around the obligation of superannuation trustees, to clarify that under those proposed reforms, as under the current law, it’s not our view that super trustees are required to check every statement of advice and we’ll continue to do our best to make that clear,” Kirkland said.
However, a week later, ASIC released an interestingly timed report that scolded super trustees over their handling of advice fee deductions.
Perhaps the strong response from ifa readers was to be expected, particularly given the sentiment has gotten so negative in some corners that the AIOFP is considering challenging the “legal validity” of the changes.
Executive director Peter Johnston said the group is even willing to test its position in “the High Court if necessary”.
“We have sought an initial legal opinion from Hamilton Locke partner Simon Carrodus around client privacy issues and concerns about superannuation trustees reviewing statements of advice that may contain product information and advice about other superannuation funds or a member’s non-superannuation products,” Johnston said.
“We will then be seeking a KC’s opinion to back-up our view that the legislation is flawed, unworkable and not in the best interests of consumers.”
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