Changes to the way superannuation members can pay for financial advice could heavily impact Australia’s low to middle-income earners, according to one of Australia’s largest industry funds.
First State Super believes that the federal government’s draft legislation proposing to remove the ability for members to pay for financial advice out of MySuper products could significantly impact the retirement outcomes of low to middle-income earners who might not otherwise be able to afford advice.
“Any legislation that creates a barrier for Australian superannuation fund members to access quality financial advice is not in our members’ or the community’s best interests,’ said First State Super chief executive Deanne Stewart.
“MySuper products are designed to be simple, but that doesn’t mean that members in these products don’t require the same advice and guidance to navigate our complex retirement system. Advice is product agnostic and is a critical service that should ultimately provide peace of mind and confidence to members, in addition to a better financial outcome.”
A third of First State’s members currently pay for advice through their MySuper product and may not be able to afford it any other way, according to Ms Stewart.
“Our members are teachers, nurses, police, firefighters, paramedics and other government workers,” she said.
“For many, their retirement goals are modest. They simply want the confidence and peace of mind to pay down debt, cover their day-to-day living expenses, maintain their current lifestyle and, remain connected to family, friends and the community they have spent a lifetime caring for and protecting.”
According to First State, research shows that the average 50-year-old was more than $50,000 better off in a MySuper product than an average Choice product – so making someone switch to pay for financial advice could have significant consequences.
“We strongly believe that the rules governing MySuper and Choice products should be the same, so all Australians have the equal access to quality, timely financial advice, to help them achieve the retirement they deserve,” Ms Stewart said.
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