Employee Benefits Consultants: directory of firms

The Corporations Act defines financial product advice as a recommendation or a statement of opinion, or a report of either, that is intended to influence a person in making a decision about a particular financial product or class of financial products, or that could reasonably be regarded as being intended to have that influence.

It distinguishes personal advice from general advice. Advice is personal where the provider has considered one or more of the person's objectives, financial situation or needs, or where a reasonable person might expect them to have considered those matters. General advice is financial product advice that is not personal advice. The requirement to hold a licence applies to a person carrying on a financial services business, whether the advice is personal or general.

There are narrow carve-outs: advice given by a lawyer in their professional capacity about matters of law, legal interpretation or applying the law to facts, and advice given by a registered tax agent or BAS agent in the ordinary course of those activities and reasonably regarded as a necessary part of them. A benefits consultant is generally in neither category. The practical test is whether the consultant is describing how a category of benefit works, or steering a person toward a particular product.

The superannuation guarantee percentage, the age and hours tests that trigger it and the payday timing are all fixed by law, and they are identical at every compliant employer in the country. Getting them right is payroll hygiene rather than a benefit, and no candidate has ever chosen one job over another because both employers obeyed the same statute. A benefits engagement that spends its time on the rate has not started yet. The questions that actually differ between employers sit above the floor: where the money goes by default, what cover travels with it, and how much of that the employee is left to work out alone.

The first of those is the employee's own choice of fund. Most employees are eligible to choose, and business.gov.au states you need to give them a superannuation standard choice form within twenty-eight days of them starting work. Where an employee makes no choice, you need to request their stapled fund details from the Australian Taxation Office, a stapled fund being an existing account already linked to that person, and you need to give their tax file number to the fund. Handled as a form to be filed, this produces employees who do not know which fund they are in. Handled as a decision, it is the single moment where an employer can usefully explain what the choice does.

The second is insurance. Australian superannuation accounts commonly carry life and disability cover inside them, which means an employee with several old accounts may be paying several sets of premiums out of balances they have forgotten about, and an employee who consolidates may lose cover they did not know they had. Explaining that this is how the system works is education and is not licensed. Telling a particular employee whether to keep a particular policy is financial product advice and is not yours to give. Contributions themselves must go through the SuperStream data and payment standard, via a compliant payroll system, a fund's own payment service or a clearing house, and business.gov.au advises checking the relevant award for any further superannuation terms.

Start with what you already pay for. Most Australian employers cannot produce a single list of every benefit, its cost, its take-up rate and its tax treatment. Building that list usually finds a benefit almost nobody uses and a cost nobody has reviewed for years.

Then ask employees what they value, by segment rather than in aggregate. Preferences differ sharply between an apprentice, a parent of young children and someone ten years from retirement, and a single average conceals all of it. Use the results to decide where the budget goes rather than adding benefits on top.

For anything touching superannuation or insurance, structure the engagement so the consultant runs the process and a licensed adviser gives any product advice. The consultant can define requirements, manage a tender, compare features against those requirements and handle implementation. The recommendation of a particular product to employees is the licensed step, and it should be visibly separated.

Many non-cash benefits attract fringe benefits tax, which is a separate tax with its own year, its own return and its own registration. business.gov.au lists registering for fringe benefits tax among the tax registrations a business may need, alongside pay as you go withholding and goods and services tax.

The practical consequence is that the cost of a benefit to the employer is not the invoice amount. A benefit with a fringe benefits tax liability can cost substantially more than it appears, while a benefit that is exempt or concessionally treated can be far better value for the same spend. Work out the tax treatment before committing, and get it from a registered tax agent rather than a benefits brochure.

Superannuation records must be kept: business.gov.au states you must keep records relating to an employee's tax and superannuation for five years, including payments made to employees, how the superannuation contribution was calculated for each employee, and how you met your obligation to give eligible employees a choice of fund.

A benefits consultant designs and administers the program: what is offered, to whom, at what cost, and how it is communicated. That work does not require a financial services licence as long as it stops short of advice on particular financial products.

A licensed financial adviser can advise employees on superannuation and insurance products, with the obligations that come with an Australian financial services licence. If your employees need individual advice on their superannuation, this is who provides it, and you should keep a clear separation between your role as employer and theirs as adviser.

An insurance broker arranges insurance and is usually remunerated by the insurer. That is a normal market structure, but ask how the broker is paid, because it bears on which products get recommended. The same question applies to any benefits consultant whose income comes partly from providers rather than entirely from you.