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 later this year.
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’.
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):
From 1 December 2020, these amounts will no longer be deducted from your BT Super account.
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.
The following changes are based on the Royal Commission recommendations and are expected to be legislated later this year.
Under changes proposed by the Government, the deduction of any advice fees from a MySuper product will no longer be permitted. Accordingly, from 4 December 2020, the Member Advice fee will no longer be deductible from the MySuper product in BT Super, BT Super for Life and BT Super for Life – Westpac Group Plan.
These proposed changes aim to ensure you are aware of and consent to all advice fees that you pay.
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 January 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.
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 account, 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.
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 January 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 account, 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.
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 January 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 account, 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.
From 19 December 2020 you will need to provide your written consent before a fee for financial product advice can be deducted from your account. If such a fee is already being deducted from your account on an ongoing basis as at the commencement date of the proposed legislative changes which is currently expected to be 1 January 2021, a new consent will not be required until later in 2021 (based on current draft legislation).
You may also notice changes to the way you authorise the deduction of these fees from your account.
Where you have provided this consent in respect of an advice fee that is deducted on an ongoing basis (e.g. an ongoing adviser fee), this fee will continue to be deducted and paid to the relevant advice entity (e.g. your financial adviser or their licensee) until you direct us to cease paying it or your consent to the deduction of the fee is withdrawn or expires.
For advice fees that are deducted on an ongoing basis for personal advice, you will be required to provide periodic consent (generally annually) for the deduction and payment of the fee to continue. If we do not receive the required consent, we will cease deducting the fee from your account and paying the fee to the relevant advice entity.
Please visit this website in the coming weeks for confirmation of the dates referred to in this paragraph.
Effective from 19 December 2020, the following changes will apply:
Adviser Contribution Fee
From 19 December 2020, you will no longer be able to authorise us to deduct and pay the Adviser Contribution Fee.
If you have an existing arrangement for the deduction of the Adviser Contribution Fee from your account as at 19 December 2020, it will continue to be deducted and paid in the same way that it has been unless you instruct the Administrator otherwise.
Managed Fund Transaction Fee
From 19 December 2020, you will no longer be able to authorise us to deduct and pay the Managed Fund Transaction Fee. This includes any Managed Fund Transaction Fee established as part of a Regular Investment Plan.
If you have an existing arrangement for the deduction of the Managed Fund Transaction Fee from your account as at 19 December 2020, it will continue to be deducted and paid in the same way that it has been unless you instruct the Administrator otherwise.
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:
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 27 November 2020.
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.