What qualifies as limited advice for super funds?

Superannuation funds are looking to increase their delivery of limited advice via digital channels but are seeking clarity on what needs to be delivered.

In its submission to the Quality of Advice review, the Association of Superannuation Funds Australia (ASFA) said limited advice was frequently-sought as an affordable option for members.

With this in mind, funds were looking to deliver more in order to improve accessibility for their members.

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However, there were questions around what needed to be provided to the members for it to qualify as limited advice compared to general or comprehensive.

“There is also considerable potential for superannuation funds to increase their provision of limited advice using digital advice delivery channels. We are seeking greater certainty about how limited advice can be provided in a compliant manner to increase access and affordability for consumers.

“Currently, when giving limited personal advice, there can be uncertainty around whether an adviser needs to provide advice on areas that a consumer has not requested, but which may be relevant to their circumstances. We are proposing that where the individual requests the adviser to provide ‘limited advice’ on a particular topic or topics, that the legislative framework provides for this to occur without requiring advice to be provided on other matters.”

ASFA also sought clarity on the difference between ‘information’ and ‘education’ when it came to tools such as retirement calculators and case studies which were provided by funds to members. These were particularly valuable for younger or lower-income members who were unlikely to seek financial advice.

“There is considerable appetite for superannuation funds to expand the level of information and education material made available to their members, and to use tools to build members’ engagement with the information provided,” the submission said.

“There should also be clarity around how tools used by superannuation funds to engage members will be treated, including tools such as trackers, calculators, and retirement estimates.”

It stated the Australian Securities and Investments Commission (ASIC) was already considering changes to the conditional relief it provided from licensing, conduct and disclosure obligations in relation to personal advice where trustees provided retirement estimates or calculators.

“We recommend ASIC provide clarity around the types of tools that will be categorised as ‘education’ and those that will be categorised as ‘advice’.”

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