Aware Super has urged the Quality of Advice Review to explore the clarification of the scope of advice that can be collectively charged by superannuation trustees.
In its submission to the review, the super fund recommended the provision of a clear and expanded list of topics that fund can advise on and the explicit allowance of advice to be provided on an ongoing basis where the cost to serve was negligible such as through digital tools.
Aware Super argued in favour of intra-fund advice as the “only viable way to deliver accessible, affordable and high-quality advice to superannuation members at scale” but said there was a lack of clarity on the scope of advice.
“Trustees would like to continue to invest in services and provide more advice under intra-fund provisions, however there is a lack of clarity on the scope of advice which often leads trustees to take an overly cautious approach, limiting the help that can be provided before members must pay the cost of advice,” it said.
“For example, an internal review of the offerings of several funds, undertaken in 2021, noted a significant variation in the topics covered, with funds appearing to have differing views on whether issues such as Centrelink entitlement advice could be covered under the model.”
“At a minimum, it is necessary to clarify and broaden the topics that can be covered under intra-fund advice. For example, retirement topics including Centrelink eligibility and retirement budgeting should be specifically included in the advice able to be collectively charged by trustees.”
Rather than stopping at expanding or clarifying the list of topics considered in scope for intra-fund advice, Aware Super posited it would be useful for the review to conside the role of superannuation trustees more broadly in providing help, guidance, and advice to members.
“For example, current restrictions on collectively charged advice currently do not allow for any advice that may be ongoing – that is, any recommendation likely to require review.
“While we understand the desire for regular ongoing advice to not be collectively charged, as this would not be an appropriate cross-subsidisation, this restriction is less relevant for forms of advice that do not carry material per-use costs, such as digital advice.
“Given the potential to improve member outcomes, digital tools should be explicitly allowed to be integrated into a collectively-charged model in a way that encourages repeated use and check-ins by members to ensure their needs are still being met.”