The Association of Independently Owned Financial Professionals (AIOFP) has received many worried phone calls and emails from advisers affected by IOOF’s proposed changes to corporate super advice fees.
Executive director Peter Johnston says that blame is not falling on the IOOF, but on the Government that put the changes in place. “We’re not blaming the IOOF, the IOOF are just interpreting the law. We’re levelling the blame at the Government – at the Minister’s office.”
Johnston says the changes in SISA are a “blatant attempt to try and starve small business”, and that they will be to the detriment of the consumer.
“The consumer won’t know, it’ll make no different to the consumer’s account balance. But all they’ll get then – instead of an independent adviser giving unbiased advice – they’ll get a representative of the institution giving them biased advice.”
Johnston estimates about 2000 advisers have been affected by the changes.
Section 99D of SISA, states that “the trustee, or the trustees, of a regulated superannuation fund or an approved deposit fund must not include in any fee charged to any member of the fund an amount that relates to costs incurred by any person, directly or indirectly, in relation to personal advice provided by any person to an employer of one or more members of the fund.”
Trustees have limited flexibility in the types of fees they can charge to pay advisers. Under section 99F a trustee can only collectively charge members for advice where it is general advice (e.g. member education, arranging and attending policy committees) or limited, one-off personal advice about insurance, contributions but not investment choice.
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