New research released on Tuesday by the Financial Services Council (FSC) has shown that by implementing the Quality of Advice Review’s (QAR) proposals, the government would be ensuring an additional two million retirees benefit from “high quality and affordable advice” that is fit for purpose.
Although it did not pinpoint the exact QAR proposals it was referring to, it would appear that the FSC has thrown its support behind Michelle Levy’s idea to allow superannuation funds, banks and insurers to return to advice.
Commenting on the research — which revealed that QAR would help an additional 2 million retirees spend $22.5 billion more and leave $6 billion less in bequests annually by the year 2040 — the CEO of the FSC argued that if advice policy settings are left unchanged, only a third of retirees will get financial advice over the next decade.
“A generation of retiring Australians would benefit from high quality and affordable financial advice that is fit for purpose, on the topics they want, when they want it,” CEO Blake Briggs said.
“The review’s proposals would help millions of Australians put in place a plan to spend more of their superannuation with confidence and in a way that improves their financial wellbeing throughout their retirement.”
According to the FSC, the QAR reforms would increase the provision of information, products and advice that is fit for purpose for consumers — particularly those who are unable to afford comprehensive advice — while also shifting the super system’s focus towards making consumers more confident when dealing with their retirement savings.
Moreover, the FSC believes the QAR would enable increased retirement-specific advice and member engagement by enabling trustees to better guide and engage members through tools that are deterred by current regulations.
Earlier this month, FSC called for the hasty adoption of QAR proposals and underlined that the impetus was on Financial Services Minister Stephen Jones to make advice more affordable and accessible.
“… Minister Stephen Jones has made it clear to the financial advice industry [that] he understands there is an urgent need to reform financial advice rules, with 2,600 advisers leaving the profession in the last year alone,” Mr Briggs said at the time.
The FSC’s latest research has suggested that less than one in three retirees would get advice in the next decade under the current policy settings.
I wonder if these product providers will be able to provide this free advice for less than that which paid to private practice as commissions? Quality of Advice review indeed.
Having jumped through every hoop to stay in business, I will not be hanging around for this corrupt rubbish. Time to sell.
Yes, ‘fit for purpose’ but may NOT be in the clients best interest. What an absolute load of bollocks, how is advice that is only ‘fit for purpose’ to be considered ‘high quality’ its tantamount to an oxy moron.
However, it is not surprising that the FSC support the concept as they only represent the product manufacturers and always have. This is not a criticism of the FSC, they do a great job for their members, but for absolute understanding of who they don’t represent, its the financial advisers, they never have and never should. For absolute clarity, advisers to the FSC are just another distribution platform, which, thanks to the ridiculous over reach by government and the ASIC, a distribution network that is rapidly shrinking and hampered by red tape and the most ludicrous piece of legislation created to date – the Code of Ethics. This piece of poorly written rubbish, having 3 of its core standards that affect the way the adviser can deal with their clients, is and remains, completely unworkable and more importantly, out of scope of the QAR. Please, if any of you advisers out there believe that the QAR will benefit you in anyway, lose the delusion now.
Look – this rubbish is literally going to go on forever. I’m so glad I’m nearing the end. This industry is unbelievable.
Interested to see how this is going to play out.
If a pensioner walks into NAB, are they really getting advice if all they are told is “you have this big lump sum, you should put it into this investment fund”.
So basically what has happened is the banks have had to sell off their advice arms after repaying billions in money they had no right to take from their clients, and now they have convinced the Government they are good upstanding citizens that can be trusted to do the right thing.
How can “retirement specific advice” be anything but comprehensive? The scope would have to include super, retirement planning, estate planning, Centrelink, aged care, underlying investment strategies, product recommendations, cash flow and net worth projections. Unless this is done by a qualified adviser (e.g. one who has met the FASEA education standards, completed their professional year, passed the national exam and pay the ASIC levy, then how in the world could anyone at a product provider be in a position to advise on such a critical aspect of a client’s life???
the beginnings of a slow but very large train wreck about to begin
Of course the FSC (consisting of product providers) will support product providers getting back into providing “advice”.
What would benefit Australians is if the Government stopped listening to the FSC and started talking directly to key stakeholders such as actual Financial Advisers.
More so if actual Financial Advisers cared enough to have a real Advisory Association that represented the needs of Advisers. As opposed to the FPA which represents all parties in the sector including the FSC. Right now they’re merging on the basis of a) they’re broke but b) “a better voice… I say it’s the voice that conflicted and needs to be changed.
It’s a real shame Financial Advisers just don’t care about these issues.
Conflicted advice with a broader reach, by non relevant providers who do not need to meet FASEA or education standards. Will be worth what it will cost, nothing.
The way Australia can increase productivity to increase consumer service support, is to completely eliminate the Annual Fee Renewal Consent forms, bureaucratic red tape that simply does not exist in any other nation on earth. Advice productivity plunged with the incredible red-tape that has been foolishly imposed over the past 3 years. It’s like people have forgotten that fee “opt out” has always existed since 2013.
surely this will result in 2mill people getting horrendously poor, conflicted advice from a pile of uneducated desk jockeys!! Only the pure, unadulterated advice by totally non-conflicted and Harvard trained advisers could give such important guidance?
“…..2 million retirees benefit from “high quality and affordable advice” that is fit for purpose.
So, the FSC will guarantee the advice is fit for purpose, appropriate given clients overall circumstances and in the members best interest taking in to account all other offerings in the market…..I’d like to see that!!
More conflicted commentary from the FSC that will, more than likely, lead to another RC for the industry due to the questionable/conflicted advice provided via the vertically integrated model.
If the FSC likes QAR we are in trouble. Think banks!
I’m Sorry, but we had to go through hoops to get accredited, a Fasea stupid exam and yet whilst not degrading those who cant afford advice, but to people who don’t want to pay for advice. Lets put all our education aside now, so that more people can get a better retirement…..What! Why dont they just recognise that those who cant afford an advisor, be subsidised by the Govt so they can have their advise paid for. Opps, we are now talking about the Govt providing support to an industry they have decimated with regulation. Go figure.
Make Financial Planning fee’s tax deductable. Lets get some positives as to how we can better help all Australians