Super pledge: Govt promises to move on soaring cost of financial advice
Superannuation members will be able to access affordable financial advice from their funds under changes floated by the Albanese Government.
Financial Services Minister Stephen Jones says super members are missing out on social security entitlements and other benefits because they arenāt getting financial advice ahead of retirement.
Only 26 per cent of individuals closing in on retirement are seeking financial advice, the minister said in an address to the Association of Superannuation Funds of Australia.
Super funds are required to put in place a retirement strategy for members but a second set of rules makes it āalmost impossibleā for them to provide that information and advice.
āWe want to ensure that we make some cautious, careful but targeted adjustments to those rules so the funds can give appropriate information and advice to their members,ā Mr Jones told ABC Radio.
Improving access for super fund members is one of several ways Mr Jones wants to close the āadvice gapā.
You might like
Cutting unnecessary paperwork for financial advisers, which also drives up the cost of the service, is also on the ministerās agenda.
The government will investigate an expanded role for other institutions including banks and insurers, but Jones said it was a lower priority.
āIām just not compelled that the same urgency exists in these other spaces,ā he said.
Much-needed reforms in the financial services industry have triggered an āexodusā of more than 10,000 advisers since 2019, shrinking the pool of expertise and driving up the cost of the service.
Stay informed, daily
āSo, while the reforms have been effective in protecting Australians from bad advice, it has also shielded them from helpful advice,ā Jones said.
He said the lack of advice was prompting people to turn to āfinfluencersā, unlicensed online services and scammers.
āGetting more professional advisers qualified and into the practice is important,ā Mr Jones said.
The government plans to accept 14 of the 22 recommendations in the Quality of Advice review chaired by Allens partner Michelle Levy.
The review, launched by the former coalition government, was handed down in December 2022 and identified a range of barriers stopping consumers from accessing affordable advice.
The governmentās āconsidered approachā to advice reform was welcomed by Super Consumers Australia.
Director of the consumer advocacy group Xavier OāHalloran supported the clarification of laws so that super funds can helpfully answer simple questions about their retirement.
āFor example, we know people currently struggle with simple questions like, ādo I have enough to retire?ā,ā OāHalloran said.
He said it was appropriate for super funds to help people plan for retirement āso long as there are appropriate consumer safeguardsā.
Ā
Want to see more stories from InDaily Qld in your Google search results?
- Click here to set InDaily Qld as a preferred source.
- Tick the box next to "InDaily Qld". That's it.
