The super fund says it is in favour of a superannuation advice network involving non-relevant providers with a minimum level of education, and a slightly broader limit of services offered by this network.
Speaking at the Association of Superannuation Funds of Australia (ASFA) conference in Adelaide on Thursday, Sarah Forman, group executive, advice at Aware Super, said that the fund is a “really strong advocate” of increasing the ability of non-relevant providers to deliver advice.
“[Aware is] really looking at how we can expand affordable help and deliver it more cheaply as a fund,” Ms Forman said.
“The other part of the Delivering Better Financial Outcomes reforms is around who can deliver this advice and what is defined as personal advice, and we are really strong advocates for broadening out and allowing what they’re labelling non-relevant providers.”
The government’s Delivering Better Financial Outcomes package encompasses recommendations from the Quality of Advice Review which suggest that superannuation funds should be able to expand their advisory roles by appointing non-relevant providers to offer limited advice to their members. While the government has endorsed this idea, it is still ironing out the details, especially regarding the level of education these non-relevant providers should have.
Ms Forman said on Thursday that she and Aware believe funds should have the ability to craft what she referred to as a “superannuation advice framework” – a framework which governs the rules for non-relevant providers.
“We take full accountability, there’s a minimum standard education, it may be something equivalent to RG146,” Ms Forman said.
Under this framework, she envisions funds implementing boundaries to limit what these non-relevant providers can touch on.
“In most instances, they’re probably using a digital tool and explaining the outcomes of that digital tool, that has most of the smarts in it, to a member. But it is a fully personalised answer that is saying, ‘Here’s what I think you need to do’, and that’s what our members are needing.”
Ms Forman also revealed that the government is still consulting with super funds around the implementation of the QAR reforms. She said Aware fully supports the collectively charged model being proposed and believes advice from a fund is essential to increasing access to advice.
“Aware is a strong advocate for a slight expansion of what you can do under that collectively charged model, which is absolutely affordable for members and for some members, it will be the only piece of advice they get in their whole lifetimes,” she said.
But Aware also believes funds should be able to “diverge slightly” from a members’ interest in the fund.
“For us, the extension of that is that you can extend it out to include a couple or household and you have a good solid conversation around their age pension entitlements and Centrelink and diverge slightly from only their interest in the fund. Because we’re finding that’s quite limiting,” Ms Forman said.
“We think that being able to make that extension is a really important difference to really dial up the volume of people that you can help in a really cost-effective way.”
In August, ifa reported that the superannuation funds taking part in Treasury roundtables consulting on the three streams of the QAR don’t have consensus on the government’s response.
“What was most surprising to me was that in stream two, super funds themselves were not aligned on what they thought [of] stream two … And that surprised me, because I guess I thought they would be pretty happy with the idea that they could employ people who weren’t fully qualified to talk to their members about super,” said Financial Advice Association Australia chief executive Sarah Abood at the time.
Aware’s digital tool welcomed
Considering the role digital advice plays within super funds, Ms Forman pointed to the recent success of its My Retirement Planner digital advice offering, which allows members to model the likelihood that they will achieve the retirement income that they aspire to have.
Pointing to recent figures from Investment Trends and TAL that showed a 27 per cent gap between expected income and perceived income needed for a comfortable retirement, she said Aware is “trying to help narrow that for our members and help educate them on what actions they can take”.
“There’s a play mode. What we’ve seen since July, and we’ve only had a quite a soft launch and we’ve only very recently started promoting it to our members, but we’ve already had 28,000 uses of that digital advice tool in only a few months, with a large number of them going all the way through to a play mode and then producing the SOA at the end, because it is intrafund advice,” Ms Forman said.
“I think we’ve produced 11 or 12,000 SOAs in that time. That for us is a clear sign that members in the age brackets where the need around retirement is not front of mind for them, that we need to be finding these ways that are scalable. And we’ve complemented the digital tool with a conversation with a human.”
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