From 10 July 2024, new rules apply to super funds when allowing their members to pay for financial product advice using their superannuation savings. Arrangements that pre-date 10 July 2024 are potentially valid for another 12 months.

The new rules focus on the forms used when members request or consent to their superannuation being used to pay for financial product advice. If the government creates a standard form, all super funds will have to use that form.

Originally, the proposed reforms included wording that specifically prevented superannuation being used to pay for financial product advice that was unrelated to superannuation.

There were concerns this would create unreasonable compliance risks for super funds. Some were worried that super funds would have to review every piece of advice and every invoice before processing payment. The wording was therefore removed.

Super funds must still comply with the ‘sole purpose test’ meaning they must only be carried on for the purpose of superannuation. Super funds must still have processes that provide assurance that members aren’t using their superannuation to pay for advice that is unrelated to their account with the particular super fund.

The government has indicated this could include random or risk-based sampling of advice. Super funds must ensure their forms collect the following details before allowing a member to pay for advice using their superannuation (different rules apply for ongoing fee arrangements).

• Member name and contact details
• Adviser name and contact details
• Name of super fund paying for the advice
• Brief description of advice
• Request / consent from member to pay for advice using super
• Total cost of advice (or estimate)
• Amount to be paid using superannuation (or estimate)
• Member’s signature
• Date of the request
• Other prescribed details (if any).