The highlights of this week’s Super Alert are ASIC’s report on financial advice provided by funds, the Treasury’s EOI for a superannuation consumer advocacy body and regulations to support trustees’ conflicted remuneration obligations.
Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019
On 28 November 2019, the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 passed the House of Representatives without amendment. It was subsequently introduced into the Senate on 2 December 2019.
As mentioned in our Super Alert of 15 November 2019, the Bill proposes to introduce the superannuation guarantee amnesty for employers to encourage self-correction of historical superannuation guarantee non-compliance.
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Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019
On 28 November 2019, the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 was referred to the Senate Economics Legislation Committee for a report by 21 February 2020.
As mentioned in our Super Alert of 29 November 2019, the Bill reintroduces amendments to the Superannuation Guarantee (Administration) Act 1992 (Cth) to ‘ensure employees under workplace determinations or enterprise agreements have an opportunity to choose the superannuation fund for their compulsory employer contributions’.
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Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Regulations 2019
On 29 November 2019, the Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Regulations 2019 (Cth) was registered on the Federal Register of Legislation. Among other things, these regulations ‘place record-keeping requirements on Australian financial services licensees who are required to rebate conflicted remuneration’.
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Information sharing MOU between APRA and ASIC
On 28 November 2019, APRA and ASIC entered into a Memorandum of Understanding (MOU), which sets out ‘a framework for engagement, including coordination, cooperation and information sharing, between APRA and ASIC’.
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Consumer advocacy body for superannuation
On 2 December 2019, the Treasury opened an expression of interest (EOI) process to give interested parties the opportunity to contribute to the development of a consumer advocacy body for superannuation.
The objective of the advocacy body will be ‘to become the voice of consumers in policy discussions and to support access to information to educate and assist consumers, including vulnerable consumers, to navigate the superannuation system’.
The EOI is open until 13 January 2020.
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ASIC report on financial advice provided by superannuation funds
On 3 December 2019, ASIC released Report 639 Financial advice by superannuation funds. This report examines the ways in which superannuation funds help members obtain financial advice and the quality of personal advice obtained through the funds.
According to ASIC:
- ‘15% of the [advice] files [reviewed by ASIC] did not comply with the best interests duty and related obligations and there was an indication that the member was at risk of suffering financial or non-financial detriment as a result of following the advice provided’; and
- Key reasons for non-compliance were that ‘the advice provider failed to identify the subject matter of the advice and the member’s objectives, financial situation and needs…[and] the advice provider failed to conduct a reasonable investigation into financial products and base all judgements on the member’s relevant circumstances’.
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This article was written by Natalie Cambrell, Partner, Sanela Osmanovic, Associate and Joseph Cheung, Solicitor.