The Australian Securities and Investments Commission (ASIC) has confirmed that at least two companies were advertising their services to superannuation fund members to facilitate early release processes for fees of up to $300.
The early access process is normally free unless the superannuation fund members specifically seeks financial advice which has been capped at $300.
Answering a question on notice from a Parliamentary Committee, the regulator said it had identified two businesses operating online which had charged fees ranging from $199 to $299 for each transaction.
“… ASIC has proactively undertaken reviews of website material and social media posts to identify offers of assistance in lodging early release of superannuation applications,” it said. “We identified two businesses through this method and based on the information on their websites, the fees charged by these businesses varied from $199 to $299 for each transaction.”
“In each case, ASIC spoke with authorised representatives of these businesses to express concerns over fees being charged for a free service offered to superannuation members and asked them to stop offering this service. On both occasions, the providers agreed to remove material from their websites and stop offering to assist with early release superannuation applications for a fee,” it said.
“It may be that a person, who has paid fees to access superannuation, does not realise until much later that the payment of fees was not necessary. Therefore, any approach to ASIC or the Australian Financial Complaints Authority (AFCA) by such a person is likely to be delayed. Accordingly, we expect it may take some time until this behaviour is reported.”
“Circumstances in which a person is charged a fee in the mistaken belief that they need assistance to undertake an activity that is freely accessible can be distinguished from the provision of financial advice in relation to financial decisions, including whether to access early release of superannuation,” it said.
“In April 2020, ASIC granted relief to the financial services industry to provide affordable and timely financial advice during the COVID-19 pandemic, with the cost of early access to superannuation advice to be capped at $300. However, we understand consumers may have been charged more where additional services were provided, subject to the complexity of their individual financial circumstances.”