Addressing the ASFA virtual conference on Friday, ASIC commissioner Danielle Press said super funds’ responsibility to provide proper advice to members would become more pronounced as the retail advice industry shrunk in response to regulatory change.
“The challenges associated with the current advice framework and the reforms and structural changes mean there’s a risk consumers that have advice needs will not be able to meet those, so super funds can play an important role in providing that advice,” Ms Press said.
“But it must be provided in a compliant manner. The recent High Court decision on Westpac provides a clear delineation between personal and general advice, so I encourage trustees to ensure they’re not inadvertently providing personal advice without adhering to the best interest duty and other obligations triggered by personal advice.”
The decision handed down earlier this month saw the High Court dismiss Westpac’s appeal around a case brought by the corporate regulator relating to a telephone campaign conducted by the major bank between 2013 and 2016, encouraging members to consolidate their super into their BT fund.
The case was originally won by Westpac in the Federal Court in 2019, but ASIC won an appeal to the full court later that year when it was found the bank’s staff had given personal advice in the majority of the calls, without conducting the proper product comparisons required.
Ms Press said the regulator would “take enforcement action where it’s necessary to protect consumers” when it came to super fund advice, but also flagged such action may not necessarily encompass litigation, in what could be seen as a softening of ASIC’s tough stance under outgoing chair James Shipton.
“[Litigation] is an important component of our approach to compliance, but it’s coupled with the entire regulatory toolkit,” she said.
“That means we won’t necessarily be looking to make enforcement only through the courts.”
