Treasury’s plan to allow super funds to offer comprehensive income products for retirement to members without the involvement of a licensed adviser is “not in the public interest”, according to Lifespan.
Last week, ifa reported that Treasury intends to make comprehensive income products for retirement (CIPRs) available to super members regardless of whether or not they’ve sought financial advice.
“That means we need to look at what the definition of intra-fund advice is going forward to accommodate that,” he said.
In comments made to ifa, Lifespan chief executive Eugene Ardino said this approach is inappropriate for CIPRs due to their complex nature.
“With all due respect to Treasury, I think the notion of deregulation of who can advise on a complex product such as a CIPR is not in the public interest and in fact would be detrimental to the retiree,” he said.
“Anyone can invest in a product without advice, whether or not it is regulated. The only thing you can regulate is who can advise on certain products and who cannot. So, what Treasury seems to be suggesting is that it be possible for anyone to advise on these investment products, including the person trying to sell it.”
Further, Mr Ardino agreed with suggestions made by Rice Warner in June that CIPRs should be considered a financial product and fall under the AFSL scheme, adding that the current proposal leaves clients vulnerable.
“If you go with this suggestion then you would have the sales team of a super fund trying to sell these products to retirees and I’m sure I don’t need to explain the problems with this model. If you want to structure CIPRs so that clients won’t need advice then structure them so that they are simple, which is difficult as they are complex instruments,” he said.
“You will not stop clients from receiving advice on CIPRs anymore than you can force clients to seek advice on financial products. All you can do is decide who can and cannot provide that advice and there is just no good reason to say that anyone can advise on CIPRs.”
The prudential regulator has announced one of its planned new restrictions for individual disability income insurance (IDII) will be pushed back a yea...
Treasury could opt to scrap general advice entirely as part of its 2022 Quality of Advice Review, but the move would need to be carefully reviewed to ...
The wealth giant has unveiled a raft of management changes – including the exit of a key advice executive – following new AMP Australia chief exec...