POWERED BY MOMENTUM MEDIA
QOA reforms could benefit two million retirees: FSC
Implementing the Quality of Advice Review’s proposals could help two million additional Australians collectively draw down $22.5 billion more from their superannuation by 2040, according to research.
This figure could increase to 3.4 million retirees by 2060, increasing annual drawdowns to $42 billion.
The research by NMG Consulting, commissioned by the Financial Services Council, found the reforms improved access to financial advice and, in turn, “put in place a plan to spend more of their superannuation with confidence”.
“Despite the benefits of compulsory superannuation, if advice policy settings are left unchanged only a third of retirees will get financial advice over the next decade. A generation of retiring Australians would benefit from high quality and affordable financial advice that is fit for purpose, on the topics they want, when they want it,” said Blake Briggs, chief executive of the FSC.
He added: “The Review’s proposals would help millions of Australians put in place a plan to spend more of their superannuation with confidence and in a way that improves their financial wellbeing throughout their retirement”.
With the reforms, annual bequests from retired Australians paid out of the super system would decrease to $26.8 billion by 2060, down from current forecasts of $53.7 billion.
Around 100,000 additional retirees would be able to receive advice and draw down more efficiently on their super savings. This could equate to an average of $10,000 in increased retirement incomes per individual every year.
Previous research had predicted a 12% increase in the number of Australians with life insurance cover, or 432,000 Australians, by implementing a scaled advice model and other reforms to simplify advice.
Under a ‘do nothing’ approach, there would be a decrease in life cover for 612,000 Australians.
Reforming the advice framework would also reduce the cost of providing advice by almost $2000 while maintaining commissions on advised life insurance, which remains an important component of adviser remuneration.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
Recommended for you
Superannuation funds have posted another year of strong returns, but this time, the gains weren’t powered solely by Silicon Valley.
Australia’s $4.1 trillion superannuation system is doing more than funding retirements – it’s quietly fuelling the nation’s productivity, lifting GDP, and adding thousands to workers’ pay packets, according to new analysis from the Association of Superannuation Funds of Australia (ASFA).
Large superannuation accounts may need to find funds outside their accounts or take the extreme step of selling non-liquid assets under the proposed $3 million super tax legislation, according to new analysis from ANU.
Economists have been left scrambling to recalibrate after the Reserve Bank wrong-footed markets on Tuesday, holding the cash rate steady despite widespread expectations of a cut.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
99.46 3 y p.a(%)
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
