Super Alert – 9 July 2021

Welcome to the latest issue of the KHQ Super Alert. This week AFCA released a summary of the complaints which it received in the 2020/21 financial year. ASIC has provided a summary of the industry’s response to its consultation on access to financial advice.  

KHQ Lawyers - Super Alert

AFCA – Summary of complaints in FY 2020/21

On 5 July 2021, AFCA issued a media release advising that it had received more than 70,000 complaints in the past financial year. According to AFCA:

  • ‘AFCA’s investigations into a range of systemic issues resulted in remediation payments to consumers totalling nearly $32 million in the past financial year’;
  • ‘nearly 70 per cent of cases were resolved by agreement after AFCA brought the parties together, and that nearly 60 per cent of cases were resolved within 60 days’; and
  • superannuation complaints were ‘down 31 per cent, after a jump the prior year when the government allowed the early release of super at the start of COVID’.

Click here for details.

Legislation – ASIC’s product intervention powers 

On 5 July 2021, the Treasury Laws Amendment (2021 Measures No. 4) Act 2021 was registered on the Federal Register of Legislation. As referred to in our Super Alert of 25 June 2021, the Act amends the Corporations Act 2001 ‘to provide that ASIC is not prohibited from making a product intervention order that has conditions relating to fees, charges or other consideration paid or payable as remuneration by a retail client or consumer to a person, including the provider (or their associates) of a financial product’.

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ASIC – Response to advice consultation

On 1 July 2021, ASIC released a short document setting out the superannuation industry’s ‘response to consultation on promoting consumer access to affordable advice’. According to ASIC:

  • an ‘unprecedented’ number of submissions (466) were received ‘from financial advisers, licensees, industry associations and relevant stakeholders’;
  • key issues identified for RG 244 is that it is ‘too long’, ‘needs restructuring’ and ‘clashes with the FASEA Code’; and
  • key issues identified with the provision of digital advice is that there is a ‘lack of demand’ and ‘compliance concerns’.

ASIC has identified a number of initiatives which it intends to develop to assist the industry provide affordable personal advice.

Click here for details.

Reminder

As referred to in our Super Alert of 7 May 2021, the consultation period for APRA’s remuneration prudential practice guide closes on Friday 23 July.

KHQ Lawyers - Sanela Osmanovic

Sanela Osmanovic Senior Associate

Sanela is a Senior Associate in the superannuation & financial services team, and has a broad range of experience working with a range of superannuation fund trustees, superannuation administrators,... Read More

KHQ Lawyers - Damian Tarulli

Damian Tarulli Special Counsel

Damian is a special counsel in our superannuation & financial services team.

Damian has over 15 years’ experience in the financial services industry. His primary area of specialisation... Read More