It’s a common question asked by employees: “what should I do about my super?” If you are an employer or manager and feel confident of your knowledge of superannuation and investment, it can be tempting to give an answer. However, just about anything helpful you have to say will likely fall within the definition of giving financial product advice, and that could land you in very hot water.
Financial product advice is a recommendation or statement of opinion that:
The Corporations Act casts a wide net. Financial product advice can include anything you say about:
The ability to provide advice is generally restricted to holders of an Australian Financial Services Licence or their representatives. Very few employers, or their staff, fall into this category, and giving financial product advice, even inadvertently, could lead to prosecution.
You can provide factual information that does not include a recommendation, an opinion, or an intention to influence a person’s decision regarding their super. This allows you to provide information about:
You can also give your employees the Product Disclosure Statement (PDS) of your default superannuation fund. Just don’t provide any explanation of the material it contains or attempt to recommend the default fund.
How can you help?
None of this precludes you from helping your employees. You just need to go about it the right way.
For example, you can refer employees to a licensed or authorised adviser. Just be sure to disclose any benefit you may gain from making such a referral. Or you can ask a superannuation fund provider to make a presentation to your employees. Take care, though, that you don’t give the impression of either endorsing or disapproving of the fund in question.
Being asked for advice is recognition that your employees respect your views and knowledge. It can be flattering and you may well know a great deal about superannuation and investment. However, without the necessary authorisation, you need to steer well clear of financial product advice. And it’s not just you who needs to be aware of these restrictions. You need to ensure that your HR staff and line managers are also aware.
What can you tell your employees about Super
This is general information only