Corporate super adviser not addressed by FoFA
The Corporate Superannuation Specialist Alliance (CSSA) believes there is one area of financial planning still not fully understood and addressed by the FoFA debate – the role of the corporate superannuation adviser.
CSSA President, Douglas Latto, says that ”Many parties have assumed that all we do is provide personal advice to members and charge a collective fee across the membership”.
“This is not the case”, Latto says. “Most of what we deliver would be better termed as Services. For an employer, this would include tailoring a default investment strategy that will suit the majority of their workforce, negotiating better fee details on behalf of their employees, tailoring insurance benefit structures to suit the needs of employees and agreeing educational and financial literacy programmes.
“For employees, this includes the delivery of the education, helping with essential paperwork and assisting insurance claimants to obtain satisfactory outcomes.
“With our ongoing commitment of providing education to members around the features and benefits of their default superannuation funds at the workplace level, employees will be better empowered to take full advantage of these features – ultimately with a view to them becoming more involved with their superannuation and aware of their retirement needs.”
Solutions need to be tailored to the workplace. The needs for large employers often differ from smaller ones and those with multiple locations often require a separate approach.
Latto says, “The MySuper legislation, as proposed, does not allow tailoring at the workplace level. It has a “one size fits all” approach with the inability to customise benefits, such as insurance cover, or charge different fees for each workplace. In addition, the setting of this standard fee is by the trustee through the intra-fund advice fee and does not involve the employer, employee or the adviser.
“Through our presentations to the PJC and Senate Economics Committee, and our recent submission to the Productivity Commission, we have endeavoured to have this role understood and have explained why it could not simply be covered through an intra fund solution.
Mr Latto went on to say that, “the good news is that the message is being heard and understood. The reports on FoFA from both the PJC and Senate Economics Committee recommend that the Treasury re-engages with us to discuss alternative models of remuneration in alignment with the FoFA reforms.”
Latto says, “this is something we will definitely be following through with Treasury”.
