Speed up advice changes say industry funds
Industry superannuation funds are pressing the Federal Government to speed legislative changes aimed at expanding access to affordable financial advice.
The Super Members Council (SMC) has released new modelling which it says highlights with fresh urgency the need to fast-track long-awaited financial advice reforms.
A report based on the modelling has claimed a ‘silver tsunami’ of 2.8 million Australians “is now racing towards retirement”.
“The report lays out the current complexity and rigidity of Australia’s retirement system – and illuminates how that complexity is a barrier to a simple and seamless transition into retirement for many Australians,” the SMC said.
“It also finds that around 700,000 Australians over 65 who are not working full-time still have their super sitting in taxed savings-phase super accounts, lowering their disposable income in retirement.
“It calls for urgent short-term reforms to prepare the super system for the silver tsunami, including a need to:
– Expand access to simple, affordable financial advice and digital tools.
– Enable safe and effective data sharing with Government to enable funds to optimise incomes and offer retirement income dashboards to their members.
– Support Smart Retirement Pathways and suggest the best retirement income solution for them. – Preserve flexibility and retiree choice.
– Fix issues that lead to dual super accounts for retirees.
It also proposes several bolder directions for longer term reform and further consideration including:
– Simplifying a transition to tax-free income, including considering automatically removing tax from accounts at age 65 for eligible members.
– Rethinking minimum drawdown requirements for Australians with low super balances so poorer retirees can also access the benefits of moving into the tax-free retirement phase.
– Strengthening consumer protection by applying a quality filter on all retirement products.
The SMC said the report also dispelled the persistent myth that most Australian retirees are underspending their super and, instead, showed that drawdown are now typically higher than the minimum amounts required.
“In 2024–25, around 64% of tax-free retirement account holders (two in every three retirees) withdrew above the minimum, with this proportion even higher for those with less than $50,000 in super (77%).”
No mention of Real Advisers to get BS red tape reductions.
SMC just wants BackPacker FUM sales agents approved.
My prediction is that this will simply not happen for REAL advisers.
It is such an easy fix and yet none of it has been done. Odd in the extreme.
Like Ronald McDonald opining on nutrition.
The SMC should be quiet.
Mulino better get moving, his masters at the union funds are getting upset how long they have to wait to give poor quality, unqualified and conflicted advice. If the union funds can’t get him moving no one can.
I’ve told 3 potential clients this week that their Industry Super Fund customer service is so terrible I want nothing to do with them. Go back and ask why they don’t want to deal with Advisers. I said I appreciate you’ve got a lot of money, and I can add a lot of value amounting to tens of thousands in the first year alone,… but I’d rather slam my fingers in a car door than deal with your frequently complained about Industry Super Fund, that will blow my costs out of the water and make it so expensive to deal with.
If the Government were serious they’d make life easier for existing Advisers.
I can see why they think they might want to do things in-house but I can gurantee it’s going to backfire.
I’ve reached the same conclusion. I’ve had to start telling clients that if they’re set on staying with certain funds, I’d decline to take them on.
The client doesn’t care who is at fault for poor or slow service and I won’t be taking the blame for that poor service when it inevitably happens and suffering the reputational damage. Then of course there is the time/cost blowouts of trying to implement strategies of any complexity with certain industry funds.
Unfortunately this corrupt Albanese government only want to punish actual Financial Advisers who provide real, comprehensive advice on all aspects of a clients financial circumstances. Instead they would prefer to give Industry Fund Trustees an open licence to do whatever they please with Australian Retirement savings.
Why have we heard nothing from ASIC, the FPA, & APRA about the ”çash incentives” that Aware Super are giving their client base to stay with them instead of actually properly exploring their options, and choices they have, and doing whats actually in the clients best interest?? If I as a Financial Adviser offered Cash Incentives I would be told that its not ethical, and it doesn’t take into account the best interests of the client who is considering full retirement. Its a cynical deceptive tactic to simply hold funds without providing adequate advice and should be banned by ASIC and the Government!!!
On the other side of the coin I as an adviser are forced to pay for the fraud, and lack of oversight by the government in the form of an ever increasing CLSR payment, which is meant to be a last resort, but is being used as a first resort, and is financially punishing actual Financial Advisers. ASIC also are not paying attention to what actual advisers have requested, but seem to get shouted down by the labour parties mates in the Industry Fund lobby groups. Stop this corrupt & unethical behaviour. Clients deserve proper comprehensive advice, not unsophisticated non-personal advice from the mega funds who are only really interested in clipping the ticket of every retiree in Australia for very little in return. In fact there’s an arguement that this form of General advice is widely damaging to the average retiree because they are not preparing people for full retirement.
“It also finds that around 700,000 Australians over 65 who are not working full-time still have their super sitting in taxed savings-phase super accounts, lowering their disposable income in retirement.”
Perhaps they have sufficent income for now and are accumulating their super for later or their spouce or partner qualifes for age pension and the other does not. To know this you have to understand the clients situation. Like maybe an adviser does in a comprehensive advice situatuation. Making these broad brush statements sounds good but generalistions are dangerous, especially if backpacker advice is based on these generalisations, and it will be. Give them access to full comprehensive advice at a reasonble cost by removing the red tape and then Australians would be best served!
100% agree and is why no reasonable person should entertain opinions of from the vested interests that the SMC represents.