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?
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