Further guidance around Standard 6 states the adviser should “make an independent, professional assessment as to whether scoping the advice is in the best interests of the client, and not just in accordance with their preference or instruction”.

In a recent client update, law firm Mills Oakley argued that these guidelines, as well as previous guidance that intra-fund advice would only conform with Standard 2 on best interests if the adviser “exercised professional judgement on whether a limited scope engagement was appropriate”, could put intra-fund advisers between a rock and a hard place when it came to code compliance.

“In combination, Standards 2 and 6 may require advisers to scale up their enquiries even though they are necessarily scaling down their advice to meet the intra-fund rules,” the firm said.

Intra-fund advisers were further at risk of breaching Standard 3 around conflicts of interest if the trustee of the fund they were working for had not sufficiently managed these conflicts through their compliance processes, Mills Oakley said.

“Trustees need to ensure advisers are equipped to comply with Standard 3, for example with an SOA template for advice to not make a contribution or advice to take advantage of the COVID-19 early release program.”

“ASIC asked the funds about what they thought were the key conflicts of interest for their advice business and their approaches to conflicts management,” Mills Oakley said. 

“Only 29 per cent referred to the use of a conflicts management framework in their responses, which was lower than anticipated given that APRA’s Prudential Standard SPS 521 requires all super funds to have a conflicts management framework in place.”

Mills Oakley said while ASIC had yet to take further action on the results of the report — which also revealed about half of advice given by super funds may not be compliant with the best interests duty — the increasing polarisation of political debate around super meant funds could not rely on this state of affairs to continue.

“Trustees cannot afford to relax on intra-fund advice … [it] is associated with industry funds and so is a politicised issue,” the firm said. 

“The chair and other Liberal Party members of the [House] economics committee that oversees ASIC will ensure ASIC is accountable on the quality of intra-fund advice.”