Conspiracy to Ban Financial Advice Fees by Stealth by SMC and ASIC

Stu Varidel • Principal Financial Adviser

We must take responsibility and act concerning the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill, which is an attempt to ban advice fee deductions from super. This thin edge of the wedge will lead to further destructive, duplicative compliance and cost burdens that harm rather than help consumers.

The FAAA, the FSC, the Joint-Licensees, and others are arguing the case. We are not enough to move the needle alone however – you all do some of the heavy lifting and show that you can co-ordinate, communicate and motivate others including your clients and associates raising this matter with your local federal member of parliament.

If you have not been following the debate around the Bill, it is imperative that you now do to understand what is at stake here. Make no mistake – this Bill will pass the Senate unamended and become law unless we act! Make no further mistake, the drafting of 99FA in the Bill is deliberate. Perhaps Peter Smith below sums it up best when he writes:

“The SMC is the tip of the spear in an assault on the for-profit advice sector. The SMC, working with ideological factions within ASIC, is coordinating the release of its reports and public announcements to bulldoze 99FA language into law. This move will push the super fund trustee sector to adopt a more conservative “check every SOA” approach or abandon offering fee deductions altogether. It’s an incredibly sophisticated strategy, coordinated with the government and Minister Jones’ office, to further throttle for-profit advice and pave the way for the newly enshrined “qualified adviser” (aka call centre operatives) to fill the gap in advice delivery. They were relying on nobody paying attention. As for the SMC and Misha Schubert, they have shown themselves to be bad faith actors in the financial services space and not to be trusted”. He adds: “Their goal was and remains to throttle, choke, and starve the for-profit advice sector of its revenue streams. They have a long history of doing that successfully, and they are at it again, but this time in a far more indirect and camouflaged manner”.

Aleks Vickovich gives us all a little history lesson when he writes “In a submission to the inquiry around the bill, Super Consumers Australia and Choice reminded the government that “on principle” they do not support the deduction of advice fees from superannuation accounts. “People may be more likely to value advice if they have to actively pay for it from their pocket, rather than have fees deducted from their super account,” they argued, adding that if fee deductions from super must be allowed then the additional provisions are helpful in “clarifying” the existing obligations under the law”.