FAAA seeks to limit super involvement in retirement planning
The Financial Advice Association of Australia (FAAA) has urged limits on the degree to which superannuation funds can provide retirement planning advice, stating that it should not be delivered on a collectively charged basis.
In its submission responding to the Government’s Delivering Better Financial Outcomes exposure draft, the FAAA has also sought to exclude people receiving external financial advice from being “nudged” by superannuation funds in respect of retirement planning.
The FAAA’s response also makes clear that the draft legislation released is too narrow to make a comprehensively definitive response and has asked that an opportunity be given when a further tranche is released.
The FAAA has listed its key recommendations responding to the DBFO second tranche as being:
- Retirement planning advice will always be complex and costly advice and should not be provided on a collectively charged basis.
- Consumer protection is paramount in the provision of super nudges, particularly with respect to retirement planning, and members should be made fully aware of the implications of acting upon these nudges.
- Super nudges should not be provided to superannuation fund members with an external financial adviser or at least should be subject to a notice to disregard the nudge if they have already obtained financial advice.
- The financial advice regulatory regime should be principles based and permit professional financial advisers to rely upon their professional judgement. ASIC guidance and enforcement must reflect this design principle.
- The opportunity to utilise a Record of Advice should be substantially expanded to better enable the use of this streamlined form of financial advice.
- Every effort must be made to sensibly rationalise what needs to be included in an advice document, including with respect to eliminating the prospect of additional obligations being added at a later time through regulation or ASIC guidance.
It could just be me – but I think I smell panic.
Probably justified.
This Government and Treasury will do whatever they want to do when they feel like doing it.
My prediction will be the creation of two playing fields.
One playing field will involve vertical integration and conflicted advice, replete with a framework of fee for no service.
The other will not.
Not looking good people.
FAAA is 100% correct.
Collective charging for personal advice is inequitable and unfair.
If retirement advice isn’t complex, then what is?
In the current world, we’re told that we need high levels of education, or a lot of experience (or both) to dispense retirement advice.
What’s the point of all this when complex advice is at risk of being dispensed by conflicted vertically integrated, zero experience, low level education agents working for super fund trustees under a collective charging model that is only accessible to them?
How in the hell is this possibly a good idea?
No doubt the vested interests will say that retirement advice is ‘simple’ because they appear to be motivated by FUM and member retention.
They’ll also probably say that it is about access to advice which is member focused. It isn’t.
In my view – every argument in Australia about advice is really a proxy control battle over $4 trillion in FUM.
It’s filthy.
Good to see the FAAA come out the blocks strong.
I had a sense that there would be an attempt to overstep the boundaries of advice which is exactly what the Industry Funds are doing now.
There current advertising is a fine example of “overreaching” what they are allowed to do. Advertising to the masses that they have the answer to every question and every individual’s needs. People are like sheep unfortunately! they will see this as a way around having to pay for Financial Advice that takes into account individual circumstances and what they really need from a professional that has done the courses and hold a degree or such after years of Education. They will adopt the thought they someone else is paying for the advice they need {collective charging}.
We now have a further three years of Labor and I don’t see anything changing soon except a greater tolerance of the parties’ allies in Super Funds and Union intervention.
WATCH THE ADVERTISING REALY TAKE OFF NOW.
Of course they are correct but they have zero leverage as an industry body
Super funds donate $X million each, annually to the Socialist Republic of Albo…FAAA meets with Junior Minister at the Dubbo RSL club for lunch, and issues a press release saying they are “deeply disappointed”. or if legislation is so conflicted, so poor and not in the interests of Australians or Advisers, they come out with the big guns saying “deeply concerned”.
What’s it going to be this time FAAA, Deeply Concerned or Deeply disappointed?
A professional Association rejects QAR and re-writes the proposal (with member feedback) based on what’s good for Australians and Advisers and lobbies Government and other vested interest to support their own proposal. Political Parties then unite behind that independent industry proposal.
Advisers need to write their own Industry Proposal and increasing affordability and access to Advice and lobby Government and Product Providers to back it.
A decade or so ago, bank advice got smashed with the ‘fox and henhouse’ stuff.
How funny is it though….
2025 – Same henhouse, different fox.
Maybe someone should do a TV commercial featuring a heavily tattooed fox riding a chromed-up motorbike into a poultry farm.
I say bring back the banks, because what they were doing with vertical integration has nothing on what the Industry Super Funds are about to do. They are a product providing conflicting advice already to their clients and its only going to get worse, much worse because they have the backing of the corrupted unions and labour government. talk about letting the fox into the henhouse. Trillions of dollars in Retirement savings are being offered up on a platter to Industry Funds so they can take just a little more for doing nothing but promote their own products.
Does this mean all products now can offer direct Retirement advice without any need for training or education.
Why even have advisers if you allow the call centre operators to simply advise Retirees into the product provider they are already in.
I can see just another situation where the call centres will be harrassing people, flogging their own industry funds. It wont be personal advice, it will be an absolute farce, and a nightmare for consumers contending with a myriad of people misrepresenting themselves as qualified advisers. Good luck to ASIC who will be stretched on raining in these activities, and the courts who will be flooded with complaints due to poor and misleading advice.
I know that I for one will be encouraging affected clients to seek legal recourse against these product providers once this conflicted advice begins to hit innocent retirees. I think I might become a lawyer, that’s where the money will be.