ASIC eases restrictions on financial advice around early super release
To help those looking to take advantage of the Government’s early super release scheme, ASIC has introduced measures to ensure Australians have access to affordable and timely financial advice.
Since the Government announced the scheme, tax agents, accountants and financial advisers have seen an uptick in demand for their services. The new measures will relax some of the restrictions they usually face.
Advice providers will no longer be required to provide a statement of advice (SOA) after discussing the early release of super with their clients.
The move will also allow registered tax agents to advise existing clients about the scheme without needing to hold an Australian Financial Services (AFS) licence.
ASIC will also issue a temporary ‘no-action’ position to superannuation trustees. That means any personal advice a super fund provides about the scheme will be classified as ‘intra-fund advice’ (general advice that is provided at no extra charge to the member), and will not result in action taken by ASIC if conduct is breached.
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ASIC has stressed that these measures are temporary and subject to strict conditions. For one, clients must be provided with a record of advice (ROA) — a document similar to an SOA which confirms advice has been provided.
It must also be established that the client is entitled to the early release of their super, and that they approached the advice provider and not vice versa.
Finally, any advice fee is to be capped at $300.
In a joint statement, five major Australian professional bodies - CPA Australia, Chartered Accountants Australia and New Zealand, SMSF Association, Financial Planning Association, and Institute of Public Accountants - voiced their support for the move.
“There has been an increasing demand for advice around early access to super since the Government announced Australians could access up to two parcels of $10,000 in superannuation tax-free as part of their second stimulus package,” they said.
"This move has removed significant red tape and ensured a simple, streamlined process is in place so those facing financial hardship during this time get the right advice.”
For more information about the kinds of support available to individuals and households, along with other tips to keep your finances in good health amid the current crisis, browse our coronavirus financial guide.