Speaking in a recent Momentum Media podcast, Shadow Minister for Financial Services, Stuart Robert, said he does not support the draft proposal from the Quality of Advice Review (QAR) to expand the role of superannuation funds in advice.
At the end of August, a proposal paper was released as part of the QAR containing a draft of recommendations for improving the regulatory framework for advice.
One of the proposals in the paper was to allow superannuation funds to be able to provide personal advice to members and charge for this advice.
Commenting on the proposal paper, Mr Robert said opening the door for super funds to give advice “would be a retrograde step”.
“Super funds are there to manage large pools of money with a long-term focus on providing a dignified retirement for everyday Australians. It’s not there to give you annual advice on a range of investment structures outside of super,” Mr Robert told the editor of Mortgage Business, Annie Kane.
“Super funds should stick to super. It’s not there to save the world and solve every problem.”
Mr Robert said that banking performed poorly in wealth and will perform badly again if it goes back to them.
“So, I’m not convinced that allowing super funds and banking into advice is the right step,” he stated.
Mr Robert said the proposals would see superannuation funds become quasi advice firms.
“Super should stick to super. Otherwise, you’ll get back to the days where you had a large financial services industry providing product advice and surprise, surprise, 76 per cent of the product advice was into [invest] in their own products,” he stated.
“You can just imagine a large super fund sitting there and going ‘we think you should invest in super and take advantage of the concessional and non-concessional contributions, take advantage of the catch up contributions for your spouse who hasn’t been working […] and don’t have that insurance over there because we’ve got group insurance over here’. I can see it a mile away.”
“We’ll be back to the same conflicted advice we were previously.”
Mr Robert does, however, support the deregulation of the advice.
“We should only have as much regulation as needed. The market has shown it’s not responding well [to the recent regulations introduced] and ordinary Australians are missing out,” he said.
To listen to the full podcast episode click here.
this was always the game – you’d have to be an LNp Muppet with your head in the sand to not recognise the whole process of knobbling the IFA – was to provide the industry super funds with unfettered access. rules dont allow – lets change the rules
What I still don’t understand to this day is why a Coalition government would implement a legislative framework that directly benefits the industry funds and therefore, their main political opponents. Pathetic lack of judgement.
Conflicted advice offerings such as proposed should never see the light of day, how can on one hand industry fund run ad campaigns inferring advice is bad in its compare the difference campaigns, be gifted the opportunity to provide conflicted advice, as that is all it could be given they will be restricted to providing advice that cannot possibly compare the two when all they have on an approved list of funds is their own funds
Dear Mr Robert, Have a chat with your LP colleagues Josh, Jane and Kelly and ask why they took the path of adviser nullification!
The industry and retail funds lobbying will make this happen, thanks for the sentiment though Mr Robert.
The Shadow Minister is right. Advisers who have transitioned to the new world after completing exams and obtaining the relevant qualifications should be able to run advice businesses with simpler rules so that they can look after more clients. Simple advice should not require complicated and expensive documentation.
Advice businesses can then use technology to assist them and use a combination of technology and human advisers to help clients.
Super funds should provide facts and information only.
Agreed – but when was that ever going to happen?
Sensible.
“We should only have as much regulation as needed. The market has shown it’s not responding well [to the recent regulations introduced] and ordinary Australians are missing out,” he said.
And who’s government caused so many of these issues? Maybe he’s finally realised he needs our votes.
The same Government appointed Levy I believe – another home goal.
The previous government did appoint Levy with an agenda of returning to the old days of vertical integration.
Second tier advice does not work, so no need for it to be re-introduced.