Australian Retirement Trust (ART) chief executive Bernard Reilly said the Quality of Advice Review (QAR) will help simplify the regulatory framework to better enable high-quality, accessible and affordable financial advice.
“We need to break down the barriers Australians face in getting financial advice, so we support the Quality of Advice Review. It’s challenging the industry to think differently about how advice can be delivered by super funds,” Mr Reilly said.
“The millions of people retiring over the next decade will need support. As one of the largest super funds in the country, we have the scale and capability to make that support more accessible, meaning more Australians will live their best retirement.
“Australian Retirement Trust is an industry leader in the financial advice space, and we want more Australians receiving affordable and accessible advice. The advice system is broken and all Australians deserve a better solution — so we welcome the Quality of Advice Review.”
The comments come on the back of ART research that found the increasing cost of living and recent economic events are causing financial stress for Australians.
Surveying over 2,000 Australians, the survey found 85 per cent are worried about the impact of recent economic events on their household budget, while almost half (48 per cent) feel financial stress at least once a week.
Despite 70 per cent of all participants believing that financial advice could improve their financial wellbeing, only 32 per cent currently access financial advice in some capacity.
ART head of advice Anne Fuchs said: “It’s good for people to be thinking about their finances — but not if it is causing stress and worry at such a high rate. That’s something that, as an industry, we should be helping to solve.
“As the survey shows, Australians know financial advice can make a difference to their wellbeing, and they want to access it. But if the vast majority face barriers, it signals that there is a problem with the system. Advice isn’t just for the wealthy, it can improve financial outcomes no matter what you earn, and everyone should have the opportunity to access it.”
Among respondents who have never sought advice, 96 per cent say there are barriers, with cost being the main one (57 per cent think advice is too expensive).
“Difficult economic times aren’t going away — we have seen seven interest rate rises in a row, with many economists forecasting more to come. Australians shouldn’t be left to manage that stress on their own and financial advice can help ease that worry,” Ms Fuchs added.
“Financial advice should be easy to get and easy to understand. As one of the largest super funds in the country, we can help make that possible, but we need the regulatory environment to enable that.”
ART isn’t the first super fund to support the QAR in the last week, with Aware Super spruiking the findings of its own survey which found that advised members were better off.
This was followed by the executive general manager of advice at Australian Unity, Matt Brown, applauding QAR reviewer Michelle Levy’s overarching focus on creating an environment for providers to deliver “high quality and affordable financial advice” that ultimately “contributes to the wellbeing of more Australians”.
Will ART be recommending clients invest outside super??
ART or at least Q Super already do the majority of their advice via the call centre rather then sending someone to see one of their advisers due to them not having a sufficient number of licensed advisers so realistically they’ll just continue pushing the boundary and since they are an industry fund ASIC will look the other way.
Hypothetically only, and in the light of the strict application of the FASEA Code of Ethics to Advisers, in particular Standard Three, how can a super fund possibly provide advice to any one, external or internal member, without contravening the ‘absolute’ of “must not advise, refer or act in any other manner where you have a conflict of interest or duty”. While I agree it makes sense for good super funds to provide advice to clients, I can see only two possibilities of avoiding a complete double standard by ASIC here (i.e: one for large entities and one for small advisers or groups of advisers): 1. The large super funds between them establish a single Advice company, that does not belong to any one of them and where its Advisers are remunerated only by client fees. OR, 2 Repeal this crazy, unworkable standard three once and for all, but does anyone imagine ASIC will do or recommend that? They have too much vested interest in keeping it there as the biggest stick they can waive over every small adviser, who pays for the bulk of ASIC’s operations and gets nothing back when they get millions in fines awarded against banks and financial institutions which play legal brinkmanship for too long. ASIC has also been guilty of turning a blind eye to conflicts of interest inherent in super funds, some banks and insurance companies already having their own advisers, or related advice businesses, who are there to direct clients their way. How much longer do the little guys have to put up with this double standard?
well is that super only or what, their insurance can very expensive ! what do they do then ?
No problem. But not only should the advisers have to be qualified and comply with all of the requirements we do, but ensure the trustee has to adhere to the FASEA Code of Ethics.
Has anyone asked Hayne what he thinks of intra-fund advice?
Sure, then let’s change regulation for other important Professions and allow nurses in rural and remote regions to provide GP consulting – agreed? Surely health is as important as financial health? So why is the Govt. hell bent on allowing more people to access financial advice via carve-outs but no such focus on carve-outs for the health sector??? I wonder if power, money and populist votes are drivers?
Look, in theory it makes sense that accessible (read low value) advice is done via internal superfund advice (think GP). As long as the client is referred to seek comprehensive specialist (high value) advice (e.g. full retirement planning) once it’s determined the client needs it. In reality, however, you’ll almost never see that happening.
The required skills of intra fund advisers are just not there…
Let’s assume ART has run of poor performance…. Will they be providing advice to their members to rollover to an external super fund?
Of course not, they can’t – it’s not allowed by the law. Nor can they recommend rollins to the fund.
Do IOOF or AMP adviser do this now. Dixon’s sure didn’t.