Good news on financial planning fees

26/05/2016

Provided by EISS.


The Beatles suggested that the best things in life are free. But I suspect that they weren't thinking of good financial planning advice. This will always come with a cost, and the cost will be higher if your situation is more complicated.

The good news is that you can now pay for half of the upfront fee of any pre-retirement financial planning advice out of your super (for members of Division 2,3 or 4, fees may only be paid from account balances relating to rollovers or voluntary contributions).  All you need to do is fill in the form, and send that to us, along with a copy of the invoice from the financial planner.

A couple of questions may occur to you, such as:

  • Why can't I take all of the fee out of super?
  • Why does this only apply to pre-retirement financial planning

The answers to both questions are similar.

The law that governs super funds is based around something that is called the sole purpose test. This says that a super fund must be used for providing retirement or death benefits. Super funds can be penalised if they do other things (which is one reason why super funds don't sell toothpaste, for example).

This affects what financial advice can be funded out of super. For example, you can get free advice from our call centre on superannuation matters such as contributions, investments and insurance. But we can't advise you on buying an investment property.

If you get external advice that comes at a cost, it has to be pre-retirement advice for us to be sure that we are complying with the sole purpose test. And we have fixed the limit at 50% of the fee as many people have other investments, or other issues that are not strictly to do with retirement but that they may receive advice on from a financial planner at the same time. This limit is set to protect the EISS and avoid financial penalties.

This deduction is not limited to any particular financial planning firm, nor is there a limit on how much you can ask to be deducted. However, any claim must be supported by an invoice from a firm that holds an Australian Financial Services Licence to give personal financial advice.

Please call the Scheme on 1300 307 844 if you or your adviser have any questions.

This information has been prepared by Electricity Industry Superannuation Board ABN 57 923 283 236 as trustee for the Electricity Industry Superannuation Scheme. This material includes general advice. The general advice had been prepared without taking into account your personal objectives, financial situation or needs. Therefore, before acting on this advice you should consider the appropriateness of the advice having regard to your personal objectives, financial situation and needs. You should also consult a licensed or appropriately authorised financial adviser before making any investment decision. Neither Mercer (Australia) Pty Ltd nor Mercer Investment Nominees Limited take any responsibility for the content or presentation of the material provided by the Trustee.

 

Electricity Industry Superannuation Board ABN 57 923 283 236 as Trustee of the Electricity Industry Superannuation Scheme.

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