ASIC concedes failure of early super SOA relief

Addressing the FSC Future of Advice Summit on Tuesday, ASIC commissioner Danielle Press said the low level of take-up of early super SOA relief had been a wake-up call to the regulator that the advice industry was too hamstrung with layers of regulation to easily provide simple advice to those who needed it, even in emergency situations.

“We as a regulator tried to move quickly and give the industry what they asked for, and what we found was it didn’t seem to help,” Ms Press said.

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“It’s exposed for me a challenge to say what is it we need to do and how do we address some of these issues differently. COVID has created an insight into what we can do as a regulator and whether there’s something more we need to do.”

The regulatory relief, provided in mid-April, saw ASIC eliminate the need to provide an SOA for advice around early access to super for financial planners, tax agents and in-house super fund advisers.

The measures were only available for advice where fees were capped at $300, the client had approached the adviser for advice and the advice provider had established the client was eligible for early release.

The Advisers Association chief executive Neil Macdonald said the relief measures had unfairly advantaged intra-fund advisers, as opposed to retail financial planners who were still subject to strict obligations even without the need for an SOA.

“The measures include a temporary no-action position for super trustees to expand the scope of personal advice that may be provided by, or on behalf of, the trustee as intra-fund advice,” Mr Macdonald said.

“However, financial advisers must still meet best interests duty and safe harbour obligations for new clients. If a client wants to see their financial adviser for intra-fund advice, the adviser should be subject to the same rules and disclosure requirements as those providing intra-fund advice on behalf of super fund trustees.”

Ms Press said ASIC was keen to collaborate with the industry around the key pieces of regulatory relief that could be provided to make advice on simple topics easily obtainable for consumers.

“Out of this process [the industry] could come up what are the five things you need, what are the bite-sized things we need government to do here to move it forward,” she said.

“If you can get some alignment on that and clarity on what the industry needs, there is a supportive regulator and government is supportive of those things if they can see the right model. Senator [Jane] Hume is also open to having conversations around what the future looks like.”