Industry funds want ability to ‘tailor’ advice
Industry superannuation funds have outlined what they hope will flow from the Government’s implementation of the Quality of Advice Review (QAR) recommendations including regulatory changes to allow funds to provide “useful nudges, and use of retirement income estimates, without providing personal advice”.
As well, the industry funds want the Government to remove what it sees as barriers to the increased and improved use of digital solutions.
In a submission to the Senate Economics Committee inquiry into Improving consumer experiences, choice and outcomes in the Australian retirement system, the Super Members Council said the Government should progress QAR reforms “that will allow super funds to provide low cost and no cost advice to members tailored to their circumstances”
“This should be progressed as soon as possible while further developing improvements to the retirement income system. Super funds should be supported by government to be innovative by:
» Removing barriers to the increased and improved use of digital solutions.
» Pursuing regulatory settings that encourage the development of tools to maximise total retirement income. This includes optimising drawdown rates, better integrating government supports (such as the Age Pension) and providing tailored retirement income projections.
» Making regulatory changes to allow funds to provide useful nudges, and use of retirement income estimates, without providing personal advice.
Elsewhere in the submission, the SMC sought to scotch suggestions that Australians were failing to drawdown on the superannuation retirement savings and are ending up leaving them as bequests.
It said fund data reveals that members are not bequeathing their super balances – they are spending it.
“Two thirds of members drew down more than the minimum in 2022-23 – on average 40% more than they are required to, even before considering lump sum withdrawals,” the submission said. “ABS data reveals 90% of women and 80% of males have no super left as they approach life-expectancy age.”
Remember when you were told that it was absolutely necessary for you to do another 6 subjects in order to advise the public ?
Aren’t you glad you went through that pain and incurred the cost ?
Where is the QAR red tape relief ?
Where is it ?
Yep, there’s a growing sense in the halls of ISA, governments and stake holders where’re becoming irrelevant. As the push for watering down, and concessions gain momentum.
QAR was only ever called to make Product Flogging much easier and cheaper for Industry Super, Banks & Life Co’s.
QAR will enable these Product Floggers 90% of the Real Advice platform just with Uneducated, Unqualified, Single Product, Vertically Owned, Conflicted, Back Packer Call Center Sales ALL PAID FOR VIA HIDDEN COMMISSIONS FROM EVERY MEMBER WHEN MOST MEMBERS WILL PAY COMMISSIONS FOR NO SERVICE.
The disgusting hypocrisy from Industry Super & Canberra is horrific and the results will be RC 2.0.
Yes, once the gate is opened, the horses will bolt, and they won’t stop until Professional Advisers are gone. Thanks for nothing QAR and Jones.
Vertical Integration and conflicted advice is alive and well, here comes RC 2.0.
No one will ever call a RC into Industry funds, there reach is wide and far, and their corporate influence is huge.
Just look at some of the recent ASIC hires.
“….that will allow super funds to provide low cost and no cost advice to members tailored to their circumstances”
Unicorn farmers.
There’s always a cost.
“Financial Advisers want ability to deliver quality unconflicted less red tape advice”, – “Tell ’em they’re dreamin!” says MP Jones.
This last statement about clients drawing down all their super just shows how disastrous industry funds have been as they are so obsessed with excluding real financial advice.
There obsession for control of Australians super funds and exclusion of actual personalised financial advice(which includes hundreds of other important factors they don’t have the ability, experience, or want to advise on) is costing people there future.
They are now suggesting they should be able to tailor the advice. Well tailored advice is essentially ’personalised advice’ which they are not trained, equipped, or licensed to carry out. They are clearly placing themselves in a serious’ conflicted remuneration’ situation that the Royal commission just fought to stamp out over the past 10 years.
If the government allows this clear conflict of interest then I believe they too should become liable for opening this Pandora’s box of ‘conflicted remuneration’ . That’s precisely what they will be doing if they allow these product providers to become quasi financial advisers.
What an insult to the real advice industry that have been decimated by the Royal commission, and severe impact of raising educational and ethical standards. They are now being told that these uneducated product floggers have the ability to do their job without essential qualifications.
Product floggers masquerading as ‘qualified advisers’ offering ‘tailored advice’. Absolutely absurd if you believe this is not an illegal conflict of interest.
Having a product provider also be the adviser is exactly why banks are no longer involved in the super industry.
Australians should be given advice from an Adviser with an unbiased, unconflicted source. The product provider clearly cannot provide ‘tailored advice’ with no conflict of interest, and they certainly are not capable of providing actual financial advice in a comprehensive way that Australians require.
By allowing the funds to provide ‘tailored advice’ without conflict, Australians need a source other than the conflicted product providers.
The continuous push in this direction is deceiving the public, and is likely to result in Royal Commission 2.0.
But I’ll bet they want advisers to be bound by a far stricter set of rules. Problem with that is that most people are no properly informed on the different standards of advice. You only have to look at people’s understanding of the difference between general and personal advice to see this. Are these funds acting in their own self interest? “of course not!’ will be the response. I call BS!
Mike, I really wonder now what the FAAA think about these developments while they seek advantage in peripheral issues that they are unlikely to win. The FAAA is a sinking ship of irrelevance again clearly. I know AFSLs are also existentially worried given their models continue to be unsustainable, the experienced compliance officer tells me. The IFMs will win because the FAAA is weak, AFSLs do not lobby well, and we as an industry lack a voice or focus on our value proposition (all media here comes with advertising, profit seeking distributors and too much product push with not enough value in what we do Mike, your media attracts disruption not support). IFMs don’t do this and this appeals to the needs and values of that consumer segment that like it simple, is simple and remains simple with little compliance objectivity being referred to in your article. cheers to choking red tape that fosters less aspiration and little or no growth.
2 sets of rules – 1 for Jonesy’s Insto mates, and the other for the stitched-up Advisers
Fair assessment. I have zero confidence in Jones.
Government should progress QAR reforms “that will allow super funds to provide low cost and no cost advice to members tailored to their circumstances” – wow! might as well bring in Santa Claus, what the ISF’s want – they just need to ask. Meanwhile back in adviser land, how’s those QAR red tape reforms and ASIC Levy fee discussions progressing…crickets…
The next announcement from Jones will be his best puffy pre-election trade-off – a massive deal for the ISF’s to offer ‘free advice’ to their members under a different set of rules (with no ASIC Levy) and a tiny consolation prize for the IFA’s in the form of a consolidated FDS. That’s the deal folks.
And just watch the big banks get back into ‘advice’ now that the thresholds have lowered…… RC2.0 here we come!
This is not a game, people have taken their own lives over the changes within the industry!! And their are plenty more with significant mental health issues!!! One reasonable set of rules and make it consistent across the board!!!
Spot on!, my thoughts exactly, what was the outcome from Philippa Hunt and Steve Prendeville’s extensive and well documented 77-page Mental Health Survey Report? Govt. and ASIC binned it, never to see daylight again, not our problem.