The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have written jointly to Australia’s licensed superannuation providers reminding them of their obligations when deducting fees and charges for third parties such as financial advisers.
In their letter, APRA and ASIC said cases of financial advice fees being charged without the provision of the relevant services had recently been the subject of inquiry by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“Separately, we have identified a range of industry practices in relation to trustee oversight, many of which fall below the standard we expect,” the letter said.
“A number of these matters are the subject of enforcement investigations or actions. This raises concerns about some trustees’ risk governance, capabilities and culture, as well as their ability to appropriately manage conflicts of interest.”
The Agencies said all trustees must have in place strong governance, risk management and oversight processes to ensure that only authorised and appropriate fees and other charges were deducted from members’ superannuation accounts.
“Accordingly, APRA and ASIC expect all trustees to be reviewing the robustness of their existing governance and assurance arrangements for fees charged to members’ superannuation accounts, and to address any identified areas for improvement in a timely manner,” the letter stated.
“We expect these reviews to be substantially completed by 30 June.”
The Agencies’ 4-page letter can be accessed at this PS News link.
