Amendments to a bill that will remove barriers for financial advice to be paid from superannuation have been welcomed by the super and advice sectors, with it being passed by parliament late today.
The federal government made changes to the Delivering Better Financial Outcomes Bill altering two provisions that would have been added to section 99 of the Superannuation Industry (Supervision) (SIS) Act.
The proposed addition, 99FA (1) (a) and (b), stated: “The trustee or the trustees of a regulated superannuation fund must not charge against a member’s interest in the fund the cost of providing financial product advice unless the financial product advice is personal advice and is wholly or partly about the member’s interest in the fund; and the amount charged does not exceed the cost of providing financial product advice about the member’s interest in the fund.”
However, the government agreed to amendments so the section now states: “The trustee or the trustees of a regulated superannuation fund must not charge against a member’s interest in the fund the cost of financial product advice provided to the member, unless the financial product advice is personal advice.”
Concerns had been raised the original provisions would have required superannuation fund trustees to check every statement of advice given to one of their fund members before advice fees could be paid from the member’s interest in the fund.
Financial Advice Association Australia chief executive Sarah Abood said the adviser body, alongside other industry organisations, had been pushing for this change and was pleased its concerns had been recognised.
“The changes to the wording of section 99FA are a positive step. It confirms that there is no intent to change the existing practice of superannuation funds when checking that financial advice fees are being paid in accordance with the sole purpose test,” Abood said.
“This should reassure superannuation funds that their existing risk-based approach can continue, minimising additional documentation requests to advisers.”
Financial Services Council chief executive Blake Briggs also noted the beneficial impact for superannuation funds and advisers.
“The government’s amendments will provide superannuation trustees greater legal certainty when deducting advice fees on behalf of superannuation consumers and will reduce the regulatory impact on financial advisers and advice businesses,” Briggs said.
“The amendments and supporting explanatory memorandum make it clear that trustees’ current risk-based approaches to assessing advice fee deductions remain appropriate.”
As a result of the changes, the bill was approved by the Senate earlier today before being referred to the House of Representatives, which also agreed to the amendments, allowing it to be passed at 4:19pm.
