Super fund trustees are being asked to help advisers by refraining from getting ahead of scheduled ‘advice fee consent’ legislation and allowing them to continue with the arrangements, at least until parliament is able to sit and ratify the changes.
Speaking on a panel at the Conexus Financial Retirement Conference in Sydney yesterday, Financial Planning Association chief executive Dante De Gori asked product providers to “hold out” if they are able to.
“Some product providers are commencing to roll out their processes ahead of legislation,” De Gori said. “Our callout is to hold out if you can, that would be a great service to financial planners and members.”
The legislation in question, which stems from recommendations 3.1 and 3.2 of the Hayne royal commission, was drafted on January 31 with a subsequent consultation process running through February. It states that trustees cannot charge members fees for advice out of their fund unless the member has consented “…and the trustee has the consent or a copy of the consent”.
While the legislation was scheduled to start on July 1, the coronavirus crisis has meant parliament will shut down until August after a final session next week to pass the government’s latest stimulus package.
“Obviously it’s realistically impossible for the government to commit to the roadmap as currently outlined,” De Gori said. “When those recommendations are legislated is unknown but the government doesn’t sit until August.
“The product providers should hold off until at least August because parliament doesn’t sit until then,” he continued, “At that time we may know more about what’s happening.”
In an earlier session at the conference, the assistant minister for superannuation, financial services and financial technology, Jane Hume, acknowledged the uncertainty around legislation that’s in limbo.
“Yes, parliament isn’t going to resume until the time is appropriate, but that doesn’t mean that things don’t get done,” Hume said.
While the lack of clarity persists, De Gori reckons advisers should be cut some slack by the funds.
“We just want them to slow down and hold back,” he said. “In particular on financial advisers who are… not just accessing business continuity measures but they’ve been inundated with calls from their clients and the public.”
The legislation itself is problematic for advisers at this time; on top of the difficulties in trying to get signed consent forms in a crisis, some funds are reportedly demanding that advice clients sign their own specific forms.
One industry fund, HESTA, has indicated it is willing to work around the regulatory hiatus. Chief advice officer Josh Parisotto says the fund is working with ASIC to make sure their team is ready to implement the new regime, but only when it comes into effect.
“It’s important we get the details of these new laws right so our members can have clarity on any changes to their existing advice arrangements,” Parisotto says.
Several other funds were contacted but unable to comment at this time.
Todd Kardash, the general manager of licensee Clearview, says he supports the FPA’s call for funds to resist jumping the gun on legislation that hasn’t been passed.
“I know what Dante’s saying and I think it’s a good thing,” Kardash tells Professional Planner. “It’s a great position to take. There’s a real overload on advisers at the moment, half of them are just trying to get their head around zoom meetings.”