The Australian Securities and Investments Commission (ASIC) has today provided guidance to employers, and other individuals or organisations who are likely to talk with employees about choice of superannuation fund (super choice). It covers the type and nature of information they can provide without holding an Australian financial services (AFS) licence.
Employers are under no obligation to talk with their employees about super choice. ASIC has provided this guidance, however, to ensure that employers who do choose to talk with their employees about super choice are aware of the information they can provide to employees without breaking the law, and of their general obligations regarding the provision of financial advice under the Corporations Act 2001 (the Act).
‘ASIC understands that with the introduction of super choice on 1 July 2005, many employers will be asked by their employees to provide information about what super choice is, the employers’ obligations under the super choice legislation, and how employees can nominate a fund as their chosen fund’, Mr Greg Tanzer, ASIC Executive Director of Consumer Protection, said.
‘ASIC is concerned to ensure that during this process, employers avoid providing information to employees, either orally or in any other form, that amounts to financial product advice about the employees’ superannuation arrangements, unless they hold an AFS licence or are otherwise authorised to provide financial advice.
‘This is to protect the interests of employees who may receive advice that is misleading, or inappropriate to their individual circumstances’, Mr Tanzer added.
The guidance, which takes the form of a frequently asked question (numbered QFS 156), cautions employers against providing financial advice, explains what constitutes financial advice, and discusses the type and nature of factual information employers can provide without being licensed, including examples of how employers can provide information on super choice to employees.
‘ASIC understands that employers are new to the financial services regime, and will be doing their best to comply with the new obligations. In the early stages of super choice, we will be taking a balanced approach to employers, and other individuals or organisations, for example, union officials, who inadvertently provide superannuation advice without being licensed’, Mr Tanzer said.
‘However, we will not hesitate to take action against employers or anyone else who knowingly breaks the law by providing superannuation (or any other financial) advice without holding a licence, or deliberately seeks to mislead or deceive employees’, he said.
QFS 156 is available on the ASIC website at www.asic.gov.au/fsrfaq. The frequently asked question is also available, along with other information for employers, on the Federal Government’s super choice website at www.superchoice.gov.au.
End of release