The government’s announced changes to financial advice regulation are a sensible step to giving more members access to the information they need to boost their retirement balances.
Industry Super Australia (ISA) welcomes the government accepting 14 of the 22 recommendations made by the Quality of Advice Review as these changes will likely improve access to quality advice for members.
The expanded role for super funds in providing personal advice – known as intra-fund advice – will allow funds to offer the information members need for retirement planning without impinging important consumer protections.
Moves to streamline paperwork requirements may also assist in making quality advice more affordable for members.
ISA is pleased the government accepted the quality of advice review recommended that super funds must consider family circumstances and how that impacts a members’ pension eligibility when offering personal advice about transitioning to retirement.
The changes also confirm super funds can consider a members’ social security entitlements.
Surveys of member contacts to industry super funds show that general advice and intra-fund advice are the most dominant service members’ access and very few access comprehensive personal advice.
Combined these offerings comprise 95% of all advice provided by surveyed funds. Less than 1% of members are referred to comprehensive personal advice.
As part of these changes the government should also expand the Your Future, Your Super performance test to retirement income products. Testing products in the retirement phase will provide the necessary quality filter that connects members to the best products stopping their nest egg from being drained.
The government plans to further consult on the remaining 8 Quality of Advice recommendations not accepted today.
Industry Super Australia will work constructively with the government and other stakeholders on reforms that will improve accessibility to quality advice without eroding consumer protections.
Industry Super Australia holds a firm position against the watering down of the best interest duty to a ‘good advice test’ as recommended by the Quality of Advice review.
Comments attributable to Industry Super Australia chief executive Bernie Dean:
“Many members first call is to their super fund when they want information on their upcoming retirement."
“Empowering funds to provide relevant information – like family member pension eligibility and tax obligations is a sensible step that will help members.”
“ISA will consult with the government on further changes that will give more Australians the meaningful information they need to plan their financial future without watering down consumer protections.”
Contact details:
James Dowling: 0429 437 851 [email protected]