Concerns raised about proposed changes to superannuation advice

Changes to financial advice flagged under the Albanese government could endanger the retirements of many Australians, say finance experts.

These same experts question a proposal that could see big superannuation players offering financial advice.

Over the past 30 years, the reputation of financial advisers has taken a beating. More recently, the advice industry’s reputation has significantly improved.

The sector has undergone a series of regulation changes and institutional ‘clean-ups’. Those seeking the advice of a registered financial adviser are now more likely to do so with confidence.

Is confidence in financial advice about to be eroded?

Michelle Levy, who led the recent Quality of Financial Advice Review, has questioned the suitability of industry super representatives dispensing financial advice.

“I worry this is the wrong place to start,” she said.

The Labor government wants to introduce new rules in response to the Quality of Financial Advice Review that was led by Ms Levy.

Under Labor’s plans, staff at big super funds will not require the same educational and ethical qualifications necessary for existing financial advisers to practise.

One of more than a dozen recommendations made in Quality of Financial Advice Review was that “superannuation fund trustees should be able to provide personal advice to their members about their interests in the fund, including when they are transitioning to retirement”.

The federal finance minister has chosen to implement this recommendation first. But Ms Levy now believes, “it’s going to be really hard to get it right”.

Ms Levy’s concerns come on the heels of a spike in complaints about super funds.

The newly-released annual report from the Australian Financial Complaints Authority detailed a 30 per cent rise in superannuation sector complaints. That includes a staggering 136 per cent surge in complaints about claim delays from superannuation funds.

Call centre concerns

Against that backdrop, some financial advisers are unhappy about call centre staff potentially offering financial advice to superannuation members.

“If the government does not require the same high standards for a person to give advice within super funds, then hard won gains in this profession in recent years will be lost,” said specialist superannuation lawyer Fiona Halsey.

However, the finance minister dismissed the concerns as scaremongering.

“Most Australians do not have complex financial affairs that require a comprehensive advice plan from an adviser,” Mr Jones said. “They just want to know how their super works for them.”

Do you have any concerns about these potential changes? How satisfied have you been with your own recent experiences with financial advisers?

Also read: How is superannuation divided during divorce?

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by Andrew Gigacz

Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.

3 Comments

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  1. Like almost everything proposed by the current Government, it shows the lack of experience and knowledge of responsible ministers, like the incredibly incompetent Linda Burney. Asking your Super Fund for advice as to how to manage your funds, is like asking your bank for advice as to where yo u should put your money. Biased! When ever ministers are questioned, they all respond with a shrug of their shoulders or don’t answer the question , mainly because they haven’t a clue

  2. Kayjay is indeed right in regards to an inexperienced Government.
    Whilst they are spending their time on the Voice the other portfolios are just not being addressed in a consultative way.
    The last thing we need is more changes to superannuation.
    The latest is an $800.00 fee by chemists on the vulnerable in Agedcare homes.
    The one sided arguement being presented to and listened to by Minister Wells on Agedcare.
    Where are the voices of residents on Minister Wells committee?
    Why is the National voice for seniors not on the committee?
    The Agedcare providers are the last people to be giving advice to Govt on fees.
    They should be balancing the debate with ideas on Agedcare.
    However it’s not in there CEO,s mindsets.
    The white paper given to the Minister is frankly embarrassing in its omissions to provide ideas for care funding.
    Cheers

  3. I have not used a financial advisor for years but the last one suggested I didnt need his help.. What concerns me with this government policy is that it might give the superannuation organisations the excuse to add a blanket financial advice fee to all members whether they use/ need it or not.
    My advice to everyone is to learn to be financially literate yourself. It’s really not that hard as you only need to understand your own circumstances. It could save you tens of thousands of dollars over your retirement and because not everyone in the industry is honest, it may preserve your life savings. Even if you use a professional it will help you to keep the bastards honest!

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