UPDATE – 25 February 2021

Parliament has now passed the proposed legislation on advice fees. This member hub is currently being updated to reflect the latest changes.

We appreciate your patience. The content will be updated shortly.

What's changing?

In 2019, the Royal Commission made some recommendations to strengthen the financial services system and the Government is proposing changes to implement these recommendations.

We are updating you on the ending of grandfathered payments (which has been legislated) and the proposed changes to advice fee arrangements which are expected to be legislated this year.

What this means for you

Ending grandfathered payments - legislated

What’s changing and when?

From 1 July 2013, certain payments made by product issuers to financial services licensees or representatives of those licensees (e.g. advisers and dealer groups) were banned as part of the Future of Financial Advice (FoFA) reforms. However, under those reforms, some of these payments were allowed to continue. These payments are referred to as ‘grandfathered payments’.

BT Super

If you joined BT Lifetime Super – Employer Plan prior to 1 November 2013 and have since been migrated to BT Super, one or more of the following grandfathered payments may have been deducted from your BT Super account as separate transaction(s):

  • Plan Service Fee;
  • Adviser Administration Fee.

From 1 December 2020, these amounts will no longer be deducted from your BT Super account.

BT Wrap

Under the new legislation any grandfathered payments will have to cease. If you are impacted by the change you will receive a separate communication providing you with additional information. 

Changes to advice fees – to be legislated

The following changes are based on the Royal Commission recommendations and are expected to be legislated early this year.

Changes to advice fees for MySuper

Under super law, many super funds offer a simple and cost-effective super investment option called MySuper. It offers members who haven't made an investment choice, a simple super solution and a way to compare funds.

BT Super, BT Super for Life, BT Super for Life – Westpac Group Plan

In December 2020 we informed you that BT had made the decision to no longer allow one-off Member Advice Fees to be deducted from MySuper accounts for BT Super, BT Super for Life and BT Super for Life - Westpac Group Plan. This decision was made in order to comply with expected legislation that would not have permitted the deduction of any advice fees from a MySuper product.

However, the final legislation has changed and will continue to allow one-off Member Advice Fees to be deducted from MySuper accounts.

As a result of this updated legislation, from 1 March 2021 BT Super, BT Super for Life and BT Super for Life - Westpac Group Plan BT will allow one-off Member Advice Fees to be deducted from MySuper accounts with consent.  You will need to continue to provide your written consent before the one-off Member Advice Fees can be deducted from your account. The changes are based on the Royal Commission Recommendation 3.2, which has been legislated in February 2021.

Proposed changes to advice fees for non-MySuper investment options (i.e. choice)

These proposed changes aim to ensure you are aware of and consent to all advice fees that you pay.

BT Super

You will need to continue to provide your written consent before the Member Advice fee can be deducted from your BT Super account.  From 1 July 2021, you will notice changes to the way you authorise the deduction of these fees and additional information provided to you as part of that authorisation process.

What do the above changes mean for me?

If you have your super balances invested in a non-MySuper (i.e. choice) investment option(s), your adviser can still arrange for the Member Advice fee to be deducted and paid from your choice investment option, provided that you give your consent by completing the Member Advice fee form.  Otherwise, you can pay the advice fee out­side of your BT Super account.  Your adviser will be able to assist you with these options.

BT Super for Life

You will need to continue to provide your written consent before the Member Advice fee can be deducted from your BT Super for Life account. From 1 July 2021, you will notice changes to the way you authorise the deduction of these fees and additional information provided to you as part of that authorisation process.

What do the above changes mean for me?

If you have your super balances invested in a non-MySuper (i.e. choice) investment option(s), your adviser can still arrange for the Member Advice fee to be deducted and paid from your choice investment option, provided that you give your consent by completing the Member Advice fee form. Otherwise, you can pay the advice fee outside of your BT Super for Life account. Your adviser will be able to assist you with these options.

BT Super for Life – Westpac Group Plan

You will need to continue to provide your written consent before the Member Advice fee can be deducted from your BT Super for Life - Westpac Group Plan account. From 1 July 2021, you will notice changes to the way you authorise the deduction of these fees and additional information provided to you as part of that authorisation process.

What do the above changes mean for me?

If you have your super balances invested in a non-MySuper (i.e. choice) investment option(s), your adviser can still arrange for the Member Advice fee to be deducted and paid from your choice investment option, provided that you give your consent by completing the Member Advice fee form. Otherwise, you can pay the advice fee outside of your BT Super for Life - Westpac Group Plan account. Your adviser will be able to assist you with these options.

BT Wrap

On 9th December, the government tabled an updated draft of legislation to implement certain recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, including recommendations 2.1 and 3.3 that concern the charging and deduction of advice fees.

The updated legislation contains several amendments to the previous draft. As a result, we have reviewed our implementation approach for BT Wrap.

What does this mean for Wrap and SuperWrap?

We deferred changes to Wrap and SuperWrap planned for the 19th December 2020. This means your adviser can continue to use existing processes and forms to arrange to have advice fees deducted from your account. The functionalities available to you and your adviser haven’t changed on the 19th December.

Additional changes to advice fees

BT Wrap

On 9th December, the government tabled an updated draft of legislation to implement certain recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, including recommendations 2.1 and 3.3 that concern the charging and deduction of advice fees.

The updated legislation contains several amendments to the previous draft. As a result, we have reviewed our implementation approach for BT Wrap.

What does this mean for Wrap and SuperWrap?

We deferred changes to Wrap and SuperWrap planned for the 19th December 2020. This means your adviser can continue to use existing processes and forms to arrange to have advice fees deducted from your account. The functionalities available to you and your adviser haven’t changed on the 19th December.

Changes to how your Transaction Account balance is managed

BT SuperWrap

Currently the balance of your BT SuperWrap Transaction Account is pooled and invested in one or more underlying bank accounts, including term deposits, that the Administrator maintains at Westpac. From 30 November 2020, the Administrator may invest Transaction Account balances in other underlying assets.

These other assets may generate investment returns other than interest. As a result, we will also be updating the description of the Transaction Account fee that the Administrator earns for administering your Transaction Account. Going forward, the Transaction Account fee will be the difference between:

  • The investment returns earned on the underlying assets that the Administrator invests Transaction Account balances in; and
  • The interest rate that the Administrator declares for your Transaction Account and which is payable to you.

    The Transaction Account fee will continue to accrue daily and the rate of interest declared by the Administrator will still not be lower than the average of the four major Australian banks for comparable transaction accounts (if available) with balances of $10,000.

Change to the responsible entity of some managed funds

The Royal Commission recommended a change to the underlying trustee structure for some managed funds (Funds) where customers are invested in.

BT Funds Management Limited ABN 63 002 916 458, AFSL 233724 (BTFM) intends to retire as responsible entity (RE) of these Funds and appoint Westpac Financial Services Limited ABN 20 000 241 127, AFSL 233716 (WFSL) as the new RE, effective from 1 March 2021.

 

Why is a change to the RE being proposed?

In 2019 the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission) made a number of recommendations, which are proposed to become legislated in 2021.

As part of these changes, from 1 July 2021 a superannuation fund trustee can’t hold a role to act in the interests of other persons, other than  as a super fund trustee.

BTFM is both an RE of some managed funds and a trustee of superannuation funds. BTFM therefore proposes to retire as RE and appoint WFSL as the new RE.

What does this mean for impacted customers?

The change of RE has no direct impact to product features, fees and costs or investment asset allocation. WFSL is another entity within the Westpac Group and the funds will continue to be managed and administered by the same people and resources within BT. BTFM considers there will be no adverse consequences due to this change in RE.

The change of RE to WFSL will result in a change to the governing board of directors that oversee the funds on behalf of unitholders. We consider this change is in line with best practice governance and will enable the Funds to continue to be managed in the best interests of unitholders while allowing BTFM to meet the requirements of the proposed legislation recommended by the Royal Commission.

The following table shows the Fund(s) you are invested in, the current RE for each Fund, and the proposed new RE for the Fund (from 1 March 2021).

Table of Impacted Fund(s)

For a list of impacted Funds - showing the current RE and the proposed new RE for each Fund (from 1 March 2021) - please click here.

We're here to help

If you have any questions, please speak to your financial adviser if you have one. Alternatively, you can call our Customer Relations team on 132 135  between 8.30am and 5.30pm (Sydney time), Monday to Friday.

Important information

This information is current as at 29 January 2021.

The information shown on this site regarding the proposed legislative changes is intended as a guide only. It is not exhaustive and does not constitute legal advice. It is based on our interpretation of the law currently in force on the date of this notification and the proposed Bills and we do not undertake to provide any further updates to the extent that any of the information in this document changes in the future. Consequently, it should not be relied upon as a complete statement of the relevant laws, the application of which may vary, depending on your particular circumstances. Before acting on it, you should seek independent financial and tax advice about its appropriateness to your objectives, financial situation and needs.