Super sector in ASIC’s sights

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The Australian Securities and Investments Commission (ASIC) will make the delivery of retirement-focused advice and services by the superannuation sector a key part of its work during the current financial year and has also committed to a review of SMSF establishment advice.

The corporate regulator outlined its intentions in its “Corporate Plan 2024-25”, released today, which identified retirement outcomes and member services from superannuation funds as one of five strategic priorities.

As part of that priority, ASIC stated it would focus on improved services for superannuation fund members, driving progress towards improving the retirement outcomes and service experience of members through the implementation of the Retirement Income Covenant (RIC), and compliance by super trustees, and providers of managed investments and financial advice.

To achieve these outcomes, the plan outlined key activities that would be undertaken, including action against misconduct that resulted in the inappropriate erosion of superannuation and action against member services failures in the super sector.

“We will take targeted enforcement action against cold-calling superannuation switching models that result in the inappropriate erosion of superannuation,” it said.

“We will take action to target misconduct in the superannuation sector, with a particular focus on member experience, including superannuation trustees’ provision of services to members, and harms arising from complaints handling and claims handling,” it added, noting the timeframe for these activities was ongoing.

Action would also be taken against superannuation trustees which do not correctly implement changes required under the RIC, with the regulator stating its ongoing monitoring of these changes would drive compliance with regulatory obligations and improve retirement outcomes for super members.

ASIC would also continue its multi-year project reviewing industry compliance with law related to contact centres and trustee administration practices and will complete its surveillance on death-benefit claims handling, taking enforcement or other regulatory action where appropriate.

In regards to the SMSF sector, it reiterated plans to review SMSF establishment advice, a move it flagged earlier this year.

“We will conduct surveillance of personal advice provided to retail clients about the establishment of SMSFs. The surveillance will assess the quality of advice by financial advisers and consider the role of AFS (Australian financial services) licensees,” it said.

“Where appropriate, we will take enforcement or other regulatory action against misconduct.”

This review would be the second into SMSF advice following similar actions in 2018 that led to the release of ASIC reports 575 and 576, which examined the quality of advice and member experience of SMSF members and the advice they received when setting up a fund.

August 22, 2024
Jason Spits
smsmagazine.com.au