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FAAA advocates $2000 Govt payment for retirement advice

Mike Taylor28 February 2024
Old couple walking on pile of coins, businessman behind them on other pile of coins

Australians approaching retirement should be able to access a means-tested limited special payment of $2000 to help pay for financial advice, according to the Financial Advice Association of Australia (FAAA).

The FAAA has told a Parliamentary Committee that the $2000 should be an interim measure which could be left in place for up to a decade.

The organisation told the Senate Economic Committee that the assistance oculd be part of a broad initiative to increase financial knowledge across the Australian population.

“The current regulatory regime makes it very difficult to provide strategic financial advice. Often this is where retirees need to start, to allow them to get a sense of their options, without committing to the full advice process,” the FAAA said.

“Increased flexibility for the provision of strategic advice would be beneficial. This might require a change to the definition of financial advice to exclude class of product advice in certain circumstances or greater flexibility through the Code of Ethics.”

“Given that lifting the level of financial knowledge in the Australian population is a long-term process, we recommend as an interim measure, perhaps for a decade, an offer to Australians of a special payment to allow them to seek financial advice. This could be something in the order of $2,000, potentially subject to means testing, and only available to those beyond a threshold age (possibly 55 or 58),” it said.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Kim
1 month ago

The nanny state is alive and well. What happened to the good old days when people took responsibility for themselves? COVID has made Australians into whingers and induced a hand-out mentality. It has to stop, you can’t have freedom of liberties but expect the government to solve all your financial problems.

All Useless
1 month ago
Reply to  Kim

– FAAAAAA in dream land, Advice can’t get a legitimate tax deduction and now ATO wants to take the GST RITC too. And these clowns propose $2k Govt handouts for Advice, Yeh NAAAH !!!
– SMSFA are spending 95% of their advocacy on the very wealthy $3mill plus individual Super balances that SHOULD PAY MORE TAX. Get over it SMSFA and Rich Boomers, pay some more tax.
– And of course Canberra Pollies, Jonsey plus Regulators promising to make Advice more Affordable and DO ABSOLUTELY NOTHING TO UNTANGLE the Gordian Knot / Hot Mess killing Real Advice & Real Advisers. Their solution to have Uneducated, Unqualified backpackers call sales centres to solve the lack of Advice is a pure Sales Agent Product Flog.
IT REALLY CANT GET ANY MORE STUFFED UP CAN IT ?

Anon
1 month ago
Reply to  Kim

Agreed that handouts are not a good idea in principle. However consumers that do take responsibility for themselves are forced to pay far too much for financial advice, due to the enormous cost burden of bad regulation.

I think this $2,000 for 10 years is a good idea if it as seen as compensation for the extra costs of bad regulation. It will take at least 10 years to unwind all the bad regulation the way Stephen Jones is going.

All Useless
1 month ago
Reply to  Anon

It will be far quicker, even at snails pace to unwind BS Mass Over Regulation than any pipe dream of $2k Govt Advice handouts occurring

Uber Qualified Adviser
1 month ago

This will NEVER happen.

Kim
1 month ago

And, if you are subject to means testing under the current settings, the Centrelink juggernaut has a Financial Information Service Officer. They DON’T provide investment advice but hey they do strategic advice to help you:

  • make informed financial decisions
  • understand the results of your decisions in the short and long term
  • prepare for retirement, even while you’re still working
  • take control of your finances to increase lifestyle choices.

There is a public supported model out there. If FAAA was real about this suggestion, rather than trying to boost private sector revenues via the public purse, they would be advocating for the FIS Officer to be more widespread.

People that have low levels of financial resources usually don’t need complex advice. It is more about increasing financial literacy and, helping them navigate the overly complicated system of government hand-outs

Nuffyland
1 month ago

April Fools Day must have come early this year. There isn’t a financial planner in the country who could deliver appropriate retirement planning advice, including the legally required SOA for $2K. Or maybe this is for their institutional buddies who will employ totally conflicted, inexperienced backers masquerading as ‘qualified advisers’, who will be able to dodge the red-tape? No doubt the FAAA will open up a new category for them to further trick the public into believing these sales people are legitimate advisers.

Skeptical
1 month ago

Hmmm, would this $2K per person means tested help those who need financial advice from a “Qualified Financial Planner”. Stephen Jones wouldn’t be pushing his union movement here would he? Your advice Mr about to retire, is to put your super into our awesome industry fund that pays you 20% p.a. with no risk. Thanks for the $2K – look how you have benefited from my strategic advice!

Davey NoFurries
1 month ago

Maybe bring the advocacy back to basic needs first – and see if we can get a tiny lil’ bit of red tape removed, perhaps??? maybe??? anyone listening???

Brian (S Paull)
1 month ago

Ah, the ever-clever FPA remnants and still sprouting such ‘Bovine merde’ and nonsense. I can’t believe the top clearer thinking AFA side of the FAAAAAAAAAA…would think like this!! At best the FP industry has penetrated 20% of the population, and the Royal Commission and endless reports in IFA and industry media of dodgies and incompetents shows a number in the 20% could have done without… ‘the experience’.

“But please Mr Government give us $2k each and we’ll improve all this and the many million Australians we haven’t even thought of approaching”. And picking the 50-55 age group when it should have started at 25 just adds to the smoke screen.
How long before do most people plan a 4-6 week holiday??? (Often a year +). So how long before would be smart for a 25 year Holiday??

But the approach does have some major benefits, and the Super Funds and other potential Mass Marketing concepts and systems will create some educators and do it well, and for a fraction of the $2K wish-wish. So I thank you for the inspiration.
(Not sure if renewing my FAAA membership is very smart move. Hmmm, We’ll see.)

Scott
1 month ago

We can’t get advice fees approved as being tax deductible in a simple manner but the FAAA expects a handout of $2k. Not a hope and welcome to April Fools Day.