Legislation

If super funds can’t implement the retirement income covenant’s mandate to provide retirement guidance, the review lead pointed out, how are they going to handle the responsibility of saving financial advice?

The minister is putting his financial advice eggs in the superannuation basket, with dramatic changes to the existing intrafund advice models being considered. “I don’t think fiddling with intrafund advice is going to get us where we need to be,” he said.

The minister was peppered with questions about phases 1 and 2 of the the government’s advice review response, as well as specialist accreditation and data access during a series of events in the sunshine state.

While finding that more research is needed to determine if the “definitions, metrics and formulas” used to calculate levies remain fit‑for‑purpose, Treasury was able to determine that advisers should no longer benefit from discounted levies.

The controversial, long-delayed scheme doesn’t protect consumers from high profile managed investment scheme failures like Sterling and Timbercorp, FAAA CEO Sarah Abood said, and could end up adding another layer of unfair fees at the feet of advisers.

Stakeholders have welcomed a recommendation from the Senate Economics Legislative Committee that the government review its controversial plan to limit franking credits stemming from capital raisings and share buybacks.

Financial services minister Stephen Jones has accepted 14 of Michelle Levy’s 22 recommendations to increase advice access, with super funds set to play an expanded role and advisers benefitting from a drastic cut to red tape. Banks and insurers, however, have had their advice reform hopes dashed – for now.

The test allows investors who can certify that they earn $250,000 a year or have more than $2.5 million in net assets to access higher-risk securities normally off-limits to individuals. But many say the test is confusing and outdated, and an independent statutory body has called for an update.

Multi-strategy separately managed accounts (SMAs) are “taking off like you wouldn’t believe”, according to SQM Research CEO Louis Christopher, but the rapid increase in their use could also be creating a regulatory blind spot.

While the move to tax superannuation balances above $3 million at a higher rate would affect only a handful of people at first, if the threshold is not indexed to inflation, future generations may be turned off from investing in their super, industry leaders say.

The proposal seeks to preserve this definition of what a superannuation complaint is, but “clarifies the policy intent that other types of superannuation-related complaints may also be under the AFCA scheme”.

Back in 2019, then-FPA CEO Dante De Gori and Tangelo Advice Consulting’s Conrad Travers engaged the ATO to see if it would be open to updating guidance on the tax deductibility of upfront advice fees. By the middle of this year, we should see the outcome.