The Australian Institute of Super Trustees’ submission to the government’s consultation on the covenant said that “obstacles to delivering quality advice” had to be considered “in tandem” with developing sound strategies for members in retirement.
“The appropriate refocusing of the retirement income debate away from a product perspective means that the long-term pathway to retirement – especially guidance and advice – becomes more important,” the industry body said.
“It does not make sense to deal with a retirement income covenant in isolation from the structure and provision of financial advice and guidance throughout a member’s working life and into retirement.”
The comments come following recent suggestions that the principles-based approach to retirement income favoured by current Financial Services Minister Jane Hume will not be possible without changing the law regarding personal advice.
The submission noted advice was currently rarely sought by super fund members due to affordability issues, and that the government needed to consider “the full breadth of regulatory and practical issues impacting on the quality and affordability of financial advice, particularly that related to advice for retirement”.
In support of the shift away from mandating certain retirement income products, the AIST said the government should bring forward its Quality of Advice review currently slated for 2022 “to progress in tandem with development of the [retirement income] covenant and be structured so as not to delay the development of retirement income strategies”.
The institute also recommended intra-fund advice be expanded to include “transition to retirement arrangements for the member and their spouse, and optimising entitlements to social security benefits”, as well as making it possible for funds to provide more personalised approaches to tools such as calculators without breaching advice rules.
“The Quality of Advice review should examine the practical issues for the design and provision of cost-effective online tools and calculators to members,” the AIST said.
“If these are allowed to be provided on a more flexible and real-world basis (e.g. using actual investment options and returns instead of generic options), super funds will be able to design tools that allow members to input their data and generate meaningful and cost-effective guidance to maximise members’ retirement outcomes.”
Looks like the Govt wants lots of general advice & very little personal advice happening. Work it out.
So FPA members…..this is what you’re membership fees will get you… a special carve out to enable AwareSuper, TelstraSuper etc etc to provide call centre Financial Advice…You’re paying membership fees for the FPA to remain silent, do no harm but also to represent those bodies more than you, and you’ll be driven out of business. Why join a body that represents all participants in the advice sector. Become a Professional and start doing the right thing by Australians please and resign from the FPA.
I think it’s time to start the Financial Advisers non-profit super fund. Just load it up with ultra-low cost index funds. Client rolls into the fund as its cheaper, and all advisers are reps of the super fund and just provide general advice, which is billed to the clients account. Of course we can sponsor some footy teams and get some corporate boxes on top to “attract more members”.
I’m in.
Union funds clearly don’t need Labor in power to do this for them when they have the Liberal Party. So far Liberals under Scott Morrison and Josh have achieve for Industry Super
1) Elimination of competition – Banks out, AMP wounded,
2) Financial Planner numbers – massively reduced and more to follow.
3) Remaining Independently owned Financial Planning practices – massive reduction in client numbers so Industry Super can have more members which Financial Planner can no longer service – thanks to Scott and Josh – Liberal
4) RC – more red tape for Financial Planners – more to come.
5) Complete removal of Commissions – yes done.
Would Scott Morrison allow Intra Fund Advice to be expanded?
Only thing I can do is NEVER EVER AGAIN VOTE LIBERAL (or Labor).
Perhaps Industry Super will vote for him?
Once again we have the total biased AIST (read representative body for union funds) calling forgreater regulation of Financial Advisers whilst at the same time calling for more advice to be provided by unqualified Industry Super staff.
Contrary to what these morons think, there is more to retirement planning than juts a persons superannuation balance.
It is past time for Jane Hume and Josh Frydenburg to step up against the ISF and there ongoing attempts to dumb down so-called advice via the tools and technology mentioned above.
Very interesting. The quotes are almost unreadable but with Anon’s help it is clear that the industry funds want special treatment while advisers’ reputations are still down.
[i]The institute also recommended intra-fund advice be expanded to include “transition to retirement arrangements for the member and their spouse, and optimising entitlements to social security benefits”, as well as making it possible for funds to provide more personalised approaches to tools such as calculators without breaching advice rules.[/i]
So they want to be able to give advice without the need to do anything that real financial planners do? Is that what I’m reading?
Yeah, that’s how I read it. Oh and accountability for the advice is determined by who your employer is and not your actual advice. What policing goes on in intra-fund land?
Ridiculous. Inequitable tripe. A total joke wrapped up in the lolly wrapper of access and affordability. For a first world country this is a 3rd world outcome when it comes to considerations of equity. Disgusting.
Whenever a union based super organisation puts out a press release it is always self serving, always in their interest. They always want to maximise inflows such as SG increases and prevent outflows such as early release for pandemic relief. In this case extend intra fund advice to prevent their members from seeing an outside adviser who might suggest another fund ie an outflow.
Time to end this corrupt intra-fund “fee for no service” now https://www.ifa.com.au/editorial/27361-why-am-i-paying-a-fee-for-no-service
Maybe we could separate product and advice all together, then we could all compete on a level playing field. Why should a super fund be the bastian of financial advice? Its only a small part of overall financial advice, why do they need to be at the centre of it? To protect FUM? What gives trustees the right to say we give advice to our members and we charge everyone for it? Why are funds allowed to hire in house planners when the banks were pulled apart for offering exactly the same service and funding strategy? Why the uneven playing field? Rewrite the rules !
Surprise, surprise. Union super lobby group AIST calls for more carve outs for intra fund advice – which is conflicted advice paid for by the fees for no service imposed on the majority of members who never use the service.
Union funds are getting more and more like AMP every day.