Clear delineation needed between advice and super ‘nudges’
There needs to be a clear boundary between the ‘nudges’ provided by superannuation funds to members around their retirement settings and the delivery of financial advice, according to the Financial Advice Association of Australia (FAAA).
What is more the FAAA wants superannuation fund members already receiving comprehensive financial advice from a financial adviser to be clearly identified and treated accordingly.
Responding to Treasury’s consultation around the Government’s proposed Retirement Reporting framework, the FAAA has urged a clear delineation between the ‘nudges’ and ‘prompts’ that super funds might give members and the actual delivery of financial advice.
“The policy settings must make it clear as to the boundary between ‘information and guidance’ provided to a member by a trustee, ‘nudges’ trustees give members, and the provision of financial advice, including general advice and personal advice,” the FAAA said.
And the FAAA’s concerns around the Government’s proposed approach extends to the use of the term “personalised information”
“The term ‘personalised information’ should not be used. This term is too closely related to ‘personal advice’, which is dependent upon reliance on knowledge of the client’s personal circumstances. A reference to ‘interest in the trustee’ is also likely to be confusing,” the association’s response said.
It said that any information and guidance provided to a super fund member by a trustee had to include “a clear warning that it is information only and not financial advice”.
As well it urged that it include “a clear recommendation to the member that they seek personal financial advice to assist them in making a decision about the retirement income options that are appropriate for their circumstances”.
“This should include a clear explanation about the difference between intrafund advice on their interest in the fund, more comprehensive advice that considers their broader personal circumstances provided by a registered relevant provider (financial adviser) and factual information,” the FAAA response said.
“In the context of the proposed introduction of a ‘new class of adviser’ (NCA) under the DBFO reforms, this distinction should also be disclosed. This disclosure should include a statement on the minimum professional standards that apply to a relevant provider versus a NCA.”
“The provision of this information is in line with the stated purpose of the Framework to ‘increase transparency’ across the retirement system,” the FAAA said.
FAAAAAAAA are correct and make fair to sensible recommendations for corrupt Canberra to use
What am I missing ?
A nudge or guidance ISN’T just information.
This is the entire point.
By the way, did we ever find out the names(s) of the person or persons who came up with the title “qualified adviser” ?
They are planning on having two different playing fields with two different sets of rules – right – back to my RoA’s and OFA’s.
More perpetuated self interest and seeking to maintain the old lines in the sand.
If Australians don’t benefit from having more modern, graduated, guidance and advice solutions, then the whole Advice Review, years of government consideration and rounds of consultation that never seem to end will result in poorer outcomes for the “missing middle” who can’t afford and don’t necessarily need full blown comprehensive advice, whether from a fund or independent adviser.
That will be a huge opportunity missed.
In what way is it self interest ?
The rules, as they currently stand are the rules everybody needs to play by.
Maybe, if the tons of red tape (which is not actually helping anybody) was removed, then the “missing middle” as you call it, could afford financial advice from someone who is qualified ?
I don’t understand the mystery ? It’s like the twilight zone.
Everybody in the industry, knows what the problem is, knows why advice is relatively expensive and knows what the solution is.
IF advisers could service 4 times the clients they do now, we probably wouldn’t even need “qualified advisers”.
It’s very simple.
Self interest in a similar way to how we were all once warned by lawyers and their peak bodies that only they, as fully qualified and registered legal practitioners, were sufficently qualified and capable of administering and operating the conveyancing industry,
that was until dedicated conveyancing practitioners and technology busted that myth and sheltered monopoly wide open, for the benefit of consumers.
So what you’re saying is that one set of advisers need to adhere to the highest standards, but it’s ok to then have another set that can participate with no experience, limited education and a single product to use. Yeah great idea champ, how is this in consumers interests?
This is remarkably different to conveyancing.
The last time I checked all of those parties/ methods had the same regulations. Converancing specialists don’t get special carves outs and get called “Qualified Advisers” and are only required to do 5 minutes of legal studies from Bendigo Night College, and have no skin in the game because the trustee of the super fund will get fined $1.50 if a member committs suicide due to poor service or a mistake.
If what you are saying is in any way true (and it is a really bad analogy), then what has all the fuss been about for the last 20 years ?
Why the dozens of hurdles to jump over to keep practicing ?
Why all the red tape ?
Are you conceding (at the very least) that most of that was unnecessary ?
Until super funds sit an ethics exam, do their cpd hours, subjected to AFCA, CSLR, BID and everything else – they should not be providing clients any advice (in whatever watered down form) what so ever.
Let’s be blunt here; the mum and dad financial planner is not the future of the FAAA. The typical FAAA member post 2028 will be a backpacker with 5 minutes of Financial Advice training and a some AI scripts provided by the Sales Manager at Hesta.
The FAAA is not putting the interests of Australians first, and neither the interest of existing members.
FACT- The FAAA never ever consulted with members, on QAR they jumped in bed with the Financial Services Council proposals and have been pushing you not what up hill ever since.
Dear FAAA members, One of the single most influential legislation put forward since FoFa, and has the FAAA ever asked what you think?