Happy New Year!
For our Australian clients:
ASIC is reviewing the regulations applying to online calculators, which are due to expire 1 April 2016, but our clients needn’t be concerned. Let me explain.
The Australian Securities and Investments Commission (ASIC) is the regulator responsible to protect consumers when they make decisions and transactions in relation to financial products. One of the areas ASIC operates in is the area of financial product advice. Providers of financial product advice need to be licensed, and comply with various provisions in the Corporations Act, and breaching these provisions carries serious penalties. On the face of it, an online calculator like the Retirement Income Simulator could be considered to be providing financial product advice because it can be used to make decisions about superannuation – how much to contribute, investment strategy, amount to draw down etc, and also because it includes default assumptions about investment returns and inflation.
ASIC sees the benefits online calculators offer to consumers, so has set some simplified rules that allow funds to provide calculators without the requirement to be licensed and comply with the provisions in the Corporations Act. These rules relate to:
The rules have been in place for 10 years and are about to expire, so ASIC has issued a consultation paper and proposed some minor changes.
What will this mean for your Retirement Income Simulator? We will be making a submission as part of the consultation process, and will be informed of the new rules and any transition period. (If you are a client offering a calculator, or even a calculator user, you could consider making a submission as well.) We will ensure that our calculators remain compliant with regulations at all times and will consult our clients on the implementation of any required changes. The licence fee for the RIS covers changes required for external events such as regulatory change. Please contact us if you have any queries.