The QAR recommended that superannuation fund trustees should be able to provide personal advice to their members about their interests in the fund, taking into account the member’s personal circumstances, including their family situation and social security entitlements if that is relevant to the advice. The review also recommended removing the restrictions on collective charging of fees.
In its response, the Government said it would clarify the topics for which superannuation funds can charge for advice and the circumstances they can consider in providing advice about a member’s interest in the fund, and to allow collective charging for advice on these topics. The Bill amends section 99F of the SIS Act to enable regulations to be made to specify circumstances in which advice will be taken to relate to the member’s interest in the fund.
The ‘Advice through superannuation’ document released with the draft Bill sets out proposed permitted advice topics (superannuation contributions, investment options, insurance held through superannuation, and retirement income), and permitted circumstances that may be taken into account in giving advice (household cashflow and income, household assets outside super, financial position of spouse, household debts and liabilities, and eligibility for government benefits). It also lists proposed ‘disallowed topics’ that are taken not to relate to the member’s interest in the fund (purchase or disposal of assets held outside super, ‘holistic financial planning’ and estate and tax planning).
The proposed rules broadly align with the existing position under the law, although having the topics specified in regulations might give trustees more confidence about giving intra-fund advice.
however, as is the case now, the intra-fund advice rules will continue to be a prohibition, not permission, and they will continue not to provide any relief from other obligations. Therefore, trustees will also need to continue to comply with the other charging rules, the best financial interests duty, the sole purpose test and the requirement to allocate costs in a fair and reasonable manner across members.