Current regulatory settings surrounding financial advice are not always helpful for superannuation members, according to First State Super.
In a submission to the Retirement Income Review, the fund said consideration needed to be given to help funds provide members with better, more personalised, information and guidance.
“Good advice and information support members with financial outcomes, and are critical in motivating and guiding them to maintain savings pre-retirement, and to staying the course in retirement. Re-regulation following the Royal Commission has been necessary and is important,” it said.
First State Super said the super system needed to be simplified from the members’ perspective through intrafund advice and digital service was critical.
The fund noted there were many challenges and barriers when it came to providing advice to people who needed help including:
“We propose a working group be formed to explore the best way to develop safe and helpful digital advice tools for members,” the submission said.
The fund said the challenge in super and retirement income was that they were wide-reaching across multiple policy areas.
“The panel could consider a co-ordinated body to look at the interconnected-policies, systems and government bodies which support retirement, to improve coordination of planning, regulation and policy setting,” it said.
“This body would facilitate comparison of interlocking policies across superannuation, taxation and social security, and test the impacts of a changing environment or change in legislative policy. The model could be based on the existing Australian Council of Financial Regulators, but be a more publicly visible body.”
It said Australia needed a “coordinated whole of system approach” and could achieve more within budget constraints through effective coordination of government bodies and regulatory planning “to ensure shared purpose and consistent policy across the Australian Taxation Office (ATO), Department of Social Services (DSS), Department of Human Services (DHS) and Treasury, hence our suggestion for a council of retirement and aged care regulators”.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
Cbus Super has unveiled Advice Essentials Plus, a new service offering affordable financial advice to both members and their partners.
The fund has launched a new tool to help deliver personalised financial education and digital personal advice to eligible members.
The QAR lead reviewer has told a Senate committee that the government’s demands of super funds conflict with their original purpose.
That is correct. Intra-Fund marketing fees should be disallowed for the provision of personal advice. For the majority of fund members they are simply additional fees for no service, and they are fees that the member cannot opt out of. This should cease ASAP.