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Industry Bodies

AFA raises privacy concerns over Trustee review of SOAs

07 Jul 2021
From

Phil Anderson

The Association of Financial Advisers (AFA) has raised concerns about APRA and ASIC’s letter to Registrable Superannuation Entity (RSE) licensees on 30 June 2021, which advised that trustees were expected to review client Statements of Advice (SOA)s as part of their obligations in respect to oversight of advice fees charged to members’ superannuation accounts.

AFA Acting CEO, Phil Anderson said, “We believe that trustee reviews of SOAs is unreasonable and may be a breach of the Privacy Act. An SOA is an agreement between a client and their financial adviser and contains a great deal of personal information about the client that should not be shared with trustees.”

In early June 2021, APRA, when responding to a Question on Notice from Senator Slade Brockman following a Senate Estimates hearing, appeared to deflect the issue.

Senator Brockman asked about the requests for copies of SOAs:

To what extent is APRA aware of these practices and what steps have you taken to address the issue that the provision of such information by financial advisers might breach the privacy obligations?

APRA’s response on 1 June 2021 was:

We understand there is a range of practices employed by trustees in this area and APRA has not been prescriptive in describing how trustees should do this.

Mr Anderson said that for APRA and ASIC to last week reinforce that trustees should be reviewing client SOAs is confusing, and a matter of great concern.

“Not only does this requirement for trustees ignore the Privacy Act obligations, therefore putting clients at risk, it is also excessive and will add to the already significant administrative burden on financial advisers.”

Mr Anderson also said, “The latest APRA and ASIC letter to RSE licensees also contains wording that further undermines the reputation of the financial advice profession, suggesting trustees shouldn’t trust advisers.”

The letter contains the following wording:

Reliance on attestations by financial advisers or advice licensees that services have been provided has limitations due to the potential for conflicts of interest, so cannot in all circumstances be relied upon.

“The AFA is calling for financial advisers and superannuation funds to argue against this excessive, unnecessary, and costly interference by the regulators,” Mr Anderson said.

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