Super trustees will be able to advise members on topics beyond their interests in the fund after the government finalises its response to the Quality of Advice Review.
Minister for Financial Services Stephen Jones has given his strongest indication yet that he is open to a more radical expansion of intra-fund advice to include a range of topics including property, debt, spousal and family assets. Traditionally, the controversial model, under which advice is charged to the collective membership of a fund, has been confined to an individual’s holdings in the fund.
At an FSC event in Sydney on Monday, Colonial First State superannuation CEO Kelly Power asked whether the scope of intra-fund advice would likely change as part of the government’s response to the QAR.
Jones replied: “If all I wanted to do was fiddle around with, or clarify, the definition of intra-fund advice, I would have done that. That would have been an easy path. Some were suggesting I should do it that way. [But] I don’t think just fiddling with intra-fund advice is going to get us to where we need to be.”
He confirmed funds will be able to do “more than we currently understand as intra-fund [advice]”, concluding an expanded model would “make sense”.
While he conceded that free information exchange between funds and government agencies like Centrelink and the ATO remained a challenge, Jones said allowing funds to advise on a broader range of topics was more “in tune with households” and the way most consumers make financial decisions.
He singled out residual mortgages and the eligible pensions or welfare entitlements of family members as examples of topics currently precluded by the narrow definition of intra-fund advice.
The comments indicate the government is warming to the model favoured by QAR lead Michelle Levy, under which “non-relevant providers” – that is, individuals who are not qualified as professional financial planners – can give advice to consumers on a range of topics beyond superannuation to consumers.
However, there is no indication Jones will support Levy’s suggestion of a “good advice duty”. He also reiterated that the expanded role would, at this stage, only be granted to super funds and not other institutions such as banks and insurers.