A tax office ruling will see investors pay 7.5 per cent more for advice obtained from super funds and platforms, despite government moves to cut advice costs.
Already a subscriber?Australians getting personal financial advice through super funds and investor-directed portfolio services, such as wrap accounts or master trusts, will soon be hit with 7.5 per cent higher advice service fees due to a change in the tax treatment of the GST.
Only 1 per cent of industry and public super fund members are advised, compared to over 99 per cent of retail master trust and platform clients. “It seems an unintended outcome that a review directed towards reducing the cost of advice service fees results in a change in the ATO view that will directly lead to higher advice service fee costs,” K&L Gates partner and indirect tax specialist Matthew Cridland said.
FSC chief executive Blake Briggs said: “The ATO’s decision means superannuation funds cannot continue the long-standing practice of passing the benefit of these refunds on to lower the cost of advice, leaving consumers worse off.” He called on Financial Services Minister Stephen Jones to “step in and stop the ATO from forcing superannuation funds to make these changes”.
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