Super Alert – 30 August 2019

This week’s Super Alert covers three releases from ASIC relating to changes to AFCA rules, research results about financial advice access and its Corporate Plan for 2019-2023, as well as APRA’s Corporate Plan for 2019-2023 and its finalised SPS 515, SPG 515 and draft SPG 516.

ASIC grants AFCA power to name trustees in determinations

On 26 August 2019, ASIC issued a media release in relation to changes it has approved to the AFCA Rules which give AFCA the power “to name financial firms in published determinations”. According to ASIC, “naming firms in determinations can help identify conduct or market problems…as well as highlighting where firms have done the right thing. It will also enhance transparency and accountability of firms’ performance in complaints handling and of AFCA’s own decision-making”.

AFCA will update its operational guidelines to “set out examples of the circumstances in which a determination naming a financial firm would not be published…[such as] where naming may expose confidential information about a firm’s systems or policies”. ASIC advised that other parties to a complaint will continue to be anonymous.

Please click here to read more.

ASIC research into financial advice consumer experience

On 26 August 2019, ASIC issued a media release in relation to its Report 627, Financial advice: What consumers really think (REP 627).

REP 627 sets out “independent research into consumer experiences of, and attitudes towards, financial advice and the advice industry…[in particular] the overall use of financial advisers, motivators and barriers to seeking personal advice and consumer attitudes towards the financial advice industry”. It sets out key statistics in relation to a range of matters including demand for advice, topics that consumers want advice on and how people choose advisers.

Please click here to read more.

ASIC Corporate Plan for 2019 to 2023

On 28 August 2019, ASIC released its Corporate Plan for 2019 to 2023. In terms of the superannuation industry specifically, ASIC’s priorities will be to “deliver as a conduct regulator for superannuation” by (amongst other things):

• “[T]aking decisive regulatory and enforcement action to deter misconduct, and supporting relevant legislative reforms”;
• “[S]upervision and surveillance of superannuation trustees focussing on whether trustees act in the best interest of consumers and treat them fairly”;
• “[I]mplementation of the superannuation recommendations of the Financial Services Royal Commission and other reviews”;
• “Issuing an updated [RG 97] and associated instruments, and communicating with industry, financial advisers and consumers about the application of the fees and costs regime”;
• “Examining advice services offered by superannuation funds to their members and testing the quality of that advice”; and
• “Supporting the extension of the existing Banking Executive Accountability Regime (BEAR) to all APRA-regulated entities, including to insurers and superannuation funds”.

Please click here to read more.

APRA releases final Member Outcomes prudential standard

On 28 August 2019, APRA issued a media release advising that it has finalised “revised measures to strengthen outcomes for superannuation members”.

APRA has released finalised versions of Prudential Standard SPS 515 Strategic Planning and Member Outcomes which commences on 1 January 2020, and issued a revised finalised version of Prudential Practice Guide SPG 515 Strategic and Business Planning.

As part of this process, APRA has also “substantially revised” SPG 516 Business Performance Review (which was formerly SPG 516 Outcomes Assessment) and has released a draft for public consultation.

Submissions on the draft SPG 516 close on 10 October 2019.

Please click here (APRA media release), here (SPS 515), here (SPG 515) and here (draft SPG 516) to read more.

APRA Corporate Plan for 2019 to 2023

On 29 August 2019, APRA released its Corporate Plan for 2019 to 2023. In terms of its objectives for the superannuation industry, the Plan notes that:

• “APRA needs to demonstrate improvements in areas that matter to the Australian community: e.g. superannuation member outcomes”;
• “APRA will actively drive a superannuation trustee culture of continuous improvement in delivering quality outcomes to superannuation members, including addressing underperformance in the superannuation industry”; and
• “APRA will seek to reduce the impact of cyber incidents to the Australian community and financial system by ensuring that APRA-regulated financial institutions are proactively undertaking continual actions to strengthen their cyber resilience”.

Please click here to read more.

This alert was written by Natalie Cambrell, Partner, Damian Tarulli, Special Counsel and Sanela Osmanovic, Associate.​​