While the FSC supports the intent of the legislation, it has reservations about banning all advice fees from MySuper products, saying it will create a “two-speed system” that charges only some members out-of-pocket-fees and will distort consumer behaviours.
The FSC would prefer the legislation be amended to allow for one-off non-ongoing advice fees to be deducted from MySuper accounts, retaining the ban on ongoing advice fees.
“This approach would be simple for consumers to understand, simplify oversight of fees, and prevent poor consumer outcomes that are likely to result from a blanket ban on advice fee payments,” said FSC CEO Sally Loane.
“Removing the ability to pay for advice from MySuper accounts will have unintended consequences, such as reducing access to financial advice many people will need, or causing arbitrage between products.”
The option to meet some of the fee for advice through a superannuation account could lower the barrier to accessing it. Ms Loane believes that if the legislation is passed as it currently stands, consumers who cannot afford to access advice could be left “materially worse off” in retirement.
The FSC writes that banning all advice fees from MySuper products is only justifiable under “incorrect assumptions” – namely that superannuation only includes advice about specific investments and is therefore not required by MySuper members, and that all MySuper members are disengaged and do not seek advice.
“In reality, many people have actively chosen a MySuper product, potentially via recommendation from their adviser, and many default members later become engaged in their superannuation (for example as they approach retirement) and seek advice about their savings,” the FSC wrote in its submission.
The FSC also holds that significant protections are already in place to ensure advice is provided appropriately.
I now realise I am really in the business of providing an admin document signing service (for the Fed Govt), & desperately need UberX type doc signers (who have signed confidentiality agreements) to go out & visit my clients to get this useless amount of paperwork signed every year, simply to get paid. I just happen to provide financial advice for free. This is how insane this 100% communist Fed Govt has gone. Meanwhile, the Union Super intra-fund advisers simply rock & collect their salaries & bonuses, in their delightful parallel universe of hidden ongoing fees (without client consent).
I have always had the view as a Financial Planner I am there to help everyone and I have never been driven by profit and money. In recent weeks I have come to the view the only way to survive in this business going forward is to become brutal in who I will speak to and retain as clients and that is a sad place to be. The requirements now mean unless you have a significant income and amount to invest I can no longer speak to you as a client. This is a position that has been forced upon me by the recent legislative requirements to operate. I hope that one day in the future the government will come to their senses and create conditions that open the affordability of advice to everyone.
“BASED ON ‘INCORRECT ASSUMPTIONS’: FSC” How Sally Loane has the audacity to talk about “incorrect assumptions” when the LIF was created through “incorrect assumptions” by ASIC and openly supported by the FSC who corruptly hid the real facts. When is this person going to realise that all credibility has gone.
First the accountants high-jacked the advisers business, now the lawyers have high-jacked the business, by imposing a legal style “one-off retainer” style fee. The upside of retainers however, is that you are not locked into “annual reviews”, if both the client & the adviser don’t feel it is necessary (nor cost-efficient with all the ridiculous levels of red tape imposed by FDS etc). Whatever happened to the free market, where clients & their adviser decide their own arrangements?