ASIC has today announced three temporary relief measures that will assist industry in providing consumers with affordable and timely advice during the COVID-19 pandemic.
Relief to facilitate advice about early access to superannuation
As part of its COVID-19 economic response, the Government introduced measures to allow individuals facing particular financial hardship due to the COVID-19 pandemic to access their superannuation early – up to $10,000 in 2019-2020 and a further $10,000 in 2020-2021.
The decision to access superannuation early is significant and many Australians will seek assistance from superannuation funds, financial advisers and registered tax agents before deciding whether to access the early release scheme.
To assist the provision of affordable advice on early access to super, ASIC has:
- allowed advice providers not to give a statement of advice (SOA) to clients when providing advice about early access to superannuation;
- permitted registered tax agents to give advice to existing clients about early access to superannuation without needing to hold an Australian financial services (AFS) licence; and
- issued a temporary no-action position for superannuation trustees to expand the scope of personal advice that may be provided by, or on behalf of, the superannuation trustee as ‘intra-fund advice’. (Intra-fund advice is provided free of charge to the recipient of the advice.)
ASIC’s relief and no-action position are temporary and subject to the important conditions, including:
- clients must be provided with a record of advice (ROA), which meets certain content requirements. An ROA is a shorter, simpler document that sets out the advice that is being provided;
- the advice fee, if any, is capped at $300;
- the advice provider must establish that the client is entitled to the early release of their superannuation; and
- the client must have approached the advice provider for the advice.
Consumers considering early access to superannuation, can also access the information on ASIC’s Moneysmart website. Many superannuation funds are also providing free general advice to their members about early access to superannuation, either on their websites or on the telephone.
Relief to extend the timeframe for providing time-critical SOAs
The demand for time-critical financial advice has increased as a result of COVID-19.
To assist financial advisers meet the demand for time-critical advice during this difficult time, ASIC has provided temporary relief to give advice providers up to 30 business days (instead of 5 business days) to give an SOA after time-critical advice is provided.
Relief to enable an ROA to be given in certain circumstances
ASIC has provided temporary relief to allow the provision of an ROA to existing clients even though:
- the clients’ personal circumstances have changed as a result of the COVID-19 pandemic; and
- the client sees an adviser from the same AFS licensee or practice, not their original adviser.
ASIC will conduct surveillance activities to monitor the advice provided under this relief, to ensure that advisers, registered tax agents and superannuation trustees are acting in the interests of their clients and members.
Duration of the temporary relief
ASIC will consider market developments and consult with key stakeholders before revoking the Instrument of relief and provide 30 days’ notice to the industry. The no action position for superannuation trustees expires when applications for early release can no longer can made.
More information about the temporary relief measures are available at:
More information on regulatory issues impacting the financial advice industry as a result of the COVID-19 pandemic is available here.
SOURCE: CPA Australia