YFYS superseding sole purpose test update

Any work on updating the guidance from the Australian Prudential Regulation Authority (APRA) of the sole purpose test has been superseded by the Your Future, Your Super (YFYS) legislation.

Helen Rowell, APRA deputy chair, said the Productivity Commission had recommended a review of the test.

“There was a productivity commission recommendation that said there would be merit in more clarity around the sole purpose test and the best financial interest duty,” Rowell said.

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“We had some guidance on the sole purpose test and its application; it’s quite old and we were undertaking work to update it.

“That work has been superseded by the Government’s measures under the YFYS bill to change the best financial interest duty and the application of that duty.”

Rowell said at this stage, APRA had not proposed to release updated guidance on the sole purpose test until “the landscape settles”.

“Even then, there’s still the question as to whether we would need to provide additional guidance,” Rowell said.

When asked if people in the financial advice industry and the superannuation industry would need to continue look to the old guidance, Rowell said yes.

“A lot of the substance in the old guidance is still appropriate, it’s just somewhat dated and written in a different way to the way we would write guidance today,” Rowell said.

Rowell previously said the YFYS legislation would give APRA more power to deal with any breaches of the sole purpose test.

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We will look into it next year. Manana, manana. However if advisers & their clients breach the sole purpose test (or the privacy act), the regulator would come down on us like a ton of bricks. But Industry Funds? Nothing to see here...move right along. Simply inept.

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