QSuper contemplating deduction of external advice fees

Big Queensland public sector super fund, QSuper has revealed it is considering allowing individual members to authorise external financial advisers to deduct advice fees.

This follows on from the fund having in June announced its withdrawal from provision of comprehensive advice.

The fund has revealed its consideration of the issue in answer to questions on notice from the House of Representatives Standing Committee on Economics, at the same time as revealing that it last financial year paid $13,606,589 for the provision of intrafund advice to its member via its wholly-owned financial planning subsidiary, QInvest Limited.

Asked whether it allowed members to use their funds to pay for financial advice, internal financial advisers or external advisers, the superannuation fund said it did not have any current arrangement for either internal or external financial advisers to deduct an advice fee.

“Last financial year, QSuper allowed QInvest financial advisers to deduct the sole purpose test portion of the comprehensive advice fee from a members account, if expressly authorised to do so by the member,” it said. “However, this service closed to new bookings on 6 July, 2020.”

“As a consequence of closing this service, QSuper is in the early stages of considering whether it is in the best interests of all QSuper members to facilitate individual members authorising external financial advisers to deduct an advice fee (where permitted under relevant laws and codes of practice).”

In terms of intrafund advice, QSuper said it had appointed QInvest Limited (QIL) to provide certain services, including the provision of financial advice services.

“These financial advice services are provided under a master services deed (MSD). Under the terms of the MSD QSuper pays QIL for the intra-fund component of financial advice, by way of a fee for the service provided to QSuper members rather than for a specific number of advisers,” it said.

“While the QSuper Fund has no financial advisers, QIL has 59 financial advisers, working across both intrafund and comprehensive advice, as at 30 June 2020, who provide financial advice to QSuper members under the agreed MSD.

“In addition, QSuper members may also appoint financial advisers from other unrelated financial planning businesses. QSuper works with these external advisers to the extent that individual members have provided the authority to do so.”