Industry funds identify advice opportunities in QAR
A major superannuation industry funds organisation has pointed to the potential for the Quality of Advice Review (QAR) recommendations to open up opportunities to provide more guidance to members without breaching the ‘personal advice’ rules.
However, in doing so, the Australian Institute of Superannuation Trustees (AIST) has cautioned that personnel working within super fund contact centres are going to have to meet minimum standards.
The AIST has published an article in which its senior policy manager, David Haynes has noted that many superannuation funds have been pleased by the final recommendations of the QAR, particularly those which would remove the requirement to provide members getting advice with copious documents that are rarely read, and promise a more streamlined advice process.
The article has been published just ahead of the Assistant Treasurer and Minister for Financial Services, Stephen Jones pointing to a role for superannuation funds in the provision of financial advice in circumstances where the number of financial advisers “does not square” with the demand for advice.
“This should help contact centres and super fund websites to be able to both answer a wider range of members’ questions and to be able to do so without getting bogged down in paperwork,” Haynes is quoted as saying in the article.
“It could potentially open up opportunities for funds to provide guidance to members through their retirement journey that they are unable to do at the moment due to their requirements to not give what is currently defined as ‘personal advice’.”
“Overall, this should mean advice becomes more accessible and affordable – and provides help to many more members than is the case now. Providing advice will be further enhanced if funds have more scope to provide intra-fund advice to their members, that is, limited advice that is ‘collectively-charged’ – built into the administration fee.”
However, Hayne noted in the article that there was “also a concern that this needs to be done in a way that continues to provide robust and comprehensive consumer protections, to ensure customers are not taken advantage of and get the advice that best meets their needs”.
It said Haynes suggested that there were things that could be done to provide protection.
“Firstly, the existing ‘best interest duty’ might provide more protections than the ‘good advice’ obligation proposed by Michelle Levy, particularly if the existing safe harbour provisions are removed.
“Secondly, the people who provide personal advice in contact centres are going to need to meet minimum standards.
“We’re waiting on the Government to announce the consultation on the review’s recommendations, so there will be plenty of opportunity for discussion about these issues.
“The Government has said they are not going to be having a review of a review, but it will be interesting to see if they intend to consider and progress all of the recommendations at the same time, or if they opt for a staged approach – my money is on the latter,” Haynes said in the article.
Why did we ban commissions they worked the same way as intra fund fees work, super fund charges more admin fee for personal advice the client might not use
So now the Industry Super Funds will be able to charge all clients extra for a service they may not even receive, and are not qualified to deliver. This gets more unbelievable every day. Sounds very much like ‘Fees for No Service ‘ to me. This fee for no service to all Industry Fund members will be hidden like most other fees are hidden within Industry Funds.
Congratulations Industry Funds. A government endorsed ‘Fee For NO Service’ regime is being proposed to be hidden in your admin fees which are already almost twice the market average for what is actually being delivered.
Meanwhile the COSLR and ASIC Levy increase and get imposed on real advisers who don’t get a wage to push 1 super product. The red tape remains and likely, suicides and exits continue.
Jones is a complacent disgrace and this is a far cry from statements in 2022 against vertical integration and guarantees to reduce compliance red tape in 3 months.
Having worked in one of Australia’s largest Super funds as a financial adviser I reckon we’re in a world of pain. The pressure to sell sell sell was immense. After working in a Bank I thought this would be a walk in the park. Every problem the solution was always going to be adding to Super or Salary Sacrificing. Having left a safe job, and a new mortgage I was forced to stay. I witnessed many Advisers churned up by their supervisor as they weren’t…”meeting members needs”‘… that’s “selling” enough. I lasted 12 months and thankfully got out before I was sacked for not selling enough. I am 110% confident allowing Super funds to give the advice in the manner by QAR is not going to end well for Australians or Advisers. Looking forward to seeing “bad advice via the super fund” on ABC Four Corners in 2028 is my guess.
Sorry to disappoint you Bemused but the ABC will never do that. I have contacted them three times regarding many matters on union funds including restrictive trade practices, poorer quality risk products that were more expensive that high quality ones with 100% commission (where’s the money gone??), non payment of life insurance claims on spurious and sometimes immoral grounds etc etc etc. Not even a thanks for contacting us. ABC gave up being a balanced reporting organisation decades ago.
Let’s see if the newly minted FAAA has any b@lls though. Your testimony is EXACTLY what we in private sector have been warning of for years. This story needs to be screamed from the rooftops. The FAAA will probably be as toothless, meek and useless as the predecessor organisations.
Agree – amazing how “multi-award winning investigative journalist” Adele Ferguson, after years of absolutely denigrating financial planners for ‘ripping off poor clients’ never ever writes against union funds??
Where’s her follow-up breaking story about this utter rort and corruption?
What a joke!
The only articles that raise issues with union super that I see are from Karen Maley, Hannah Wooten & Jonathan Shapiro at the AFR (aside from this publication and Mike Taylor, who’s been writing about this for over a decade).
did you stay in the industry?
Sad to see Jones perpetuating Levy’s lie that there aren’t enough financial advisers to meet the demand. It is disappointing this nonsense has not been called..
Fact 1. Despite the 43% wipeout, the remaining 15,800 advisers puts us on par, per capita, with the US.
Fact 2. When you work through the numbers, 15,800 advisers could deliver more than 9 million appointments per year if we were able to conduct just 3 appointments per day, 4 days per week. That number of appointments exceeds the demand, by quite a margin.
The problem is not the number of advisers, the problem is the red-tape and overreaching compliance that prevents financial advisers from working productively.