The Corporate Super Specialist Alliance (CSSA) has called on the new ministers responsible for financial services to help ensure the survival of the corporate super sector of the financial advice market.
Following ASIC’s decision to decline a request for a ‘no action letter’, CSSA president Douglas Latto says ministerial intervention is necessary to “preserve corporate super services for employers and fund members”, particularly given the threat posed by the previous government’s MySuper reforms.
“Fund members need access to general advice and information to help them improve their life insurance decisions and retirement savings outcomes,” Mr Latto said.
“Corporate super specialists have a long history of providing these very important services and we need to make sure we can continue to deliver them.
“Once MySuper starts, thousands of companies will be looking for advice to help them select a default fund for their employees.”
Association of Financial Advisers (AFA) chief executive Brad Fox previously told InvestorDaily that his organisation was concerned about the long-term prospects for corporate super advisers, which was one of the drivers behind the AFA's calling for a 12-month extension to implementation of the Future of Financial Advice (FOFA) reforms in late June.
“We think some form of extension is necessary and the reason is that there are so many things still unknown,” Mr Fox said at the time.
“The context is that government, ASIC, Treasury and the industry have all underestimated the challenge to be ready by Monday.
“It’s not through lack of resources at industry level; we still don’t have grandfathering regulations or corporate super guidance. This is a sector of the industry that has had the door shut.”
Under FOFA, a conflict arises for advisers specialising in corporate super where a practitioner undertakes a super fund selection tender and provides ongoing services paid for by the super fund. The traditional remuneration model of corporate super advisers is considered conflicted under the new regime.