In a submission to the Australian Prudential Regulation Authority (APRA), the advice association said it recognised the “fundamental role of superannuation” in the retirement income system and in supporting Australians during that stage of their lives.
“The collection and publication of clear and consistent data will assist consumers to make informed decisions when selecting a trustee to help them achieve their desired retirement outcomes,” it said in the submission.
“It is also critical to improve the transparency of the system and ensure consistent measurement of trustee performance against defined member outcome deliverables.”
Focusing on the collection of data about financial advice, the association highlighted that in its submission Treasury on the proposed reporting framework that it is important to clarify the type of advice the reporting framework is measuring.
It added it supports the focus on measuring the provision of personal financial advice, excluding other forms of financial advice, such as general advice.
“The FAAA supports the proposed approach in relation to the collection of data regarding fund member access to personal financial advice; and the take up of personal financial advice by members 60 years and over,” the association said.
“We also support the proposed publication of this data at the RSE licensee level for the personal financial advice indicators – 3, 3.1 and 3.2.”
The FAAA also threw its support behind APRA’s proposal to track whether an RSE offers members access to, or directly provides, personal financial advice services.
According to the association, measuring trustee personal advice offerings would provide valuable insight into the support funds provide members as they approach and enter retirement.
It backed APRA’s proposal to require trustees to report whether members have access to personal financial advice services through either in-house advisers or referral arrangements with third-party providers, using a simple “yes” or “no” reporting measure.
The association also supported APRA’s clarification that simply providing information about financial advice providers on a fund’s website would not be sufficient to warrant a positive response.
It did likewise for APRA’s proposed member cohorts for advice indicators, arguing it is important to distinguish between intra-fund advice and personal advice provided by an adviser selected by the member.
“It is important to differentiate between the provision of financial advice by the fund about the member’s interest in the fund, and the provision of financial advice from a financial adviser the member has selected,” the FAAA said.
The submission added that segmenting members according to how advice is paid for would create a framework that can be applied consistently across the industry and generate comparable data.
It further suggested APRA consider identifying members who continue to receive employer contributions, saying this could provide more granular insights into advice accessibility and uptake, while helping to identify gaps in the availability of personal advice at key life stages, including for Australians working beyond retirement age.
