A key industry superannuation fund body has mounted a strong defence of general advice, claiming that unconflicted general advice of the nature provided by them should not be renamed.
In a submission to the Productivity Commission (PC) inquiry into Competition in the Australian Financial System, the Australian Institute of Superannuation Trustees (AIST) urged that “general advice” not be renamed but, rather, that “conflicted general advice” be renamed.
In doing so, the AIST claimed that the problematic advice cited in the PC’s draft report all related to the impact of sales and marketing on consumer decisions.
“AIST contends that these systemic instances of poor behaviour will not be properly dealt with by holistically renaming general advice,” the submission said. “Unconflicted general advice is of benefit to members, and is being used to good effect.”
“AIST urges the Productivity Commission to recognise the benefits of unconflicted general advice,” it said.
“Unconflicted general advice is an efficient way for superannuation funds to deliver simple advice to a high volume of members facing similar issues,” the AIST submission said. “Profit-to-member funds have never paid commissions for general advice. If all general advice was renamed as product sales information, this would imply that all general advice was conflicted (which it is not).”
“Profit-to-member funds provide a wide variety of services which are ‘general advice’: superannuation seminars, retirement planning seminars, induction seminars, workplace seminars, online calculators, newsletters and advice to individuals. General advice delivered to individuals is delivered through a variety of channels including face to face, over the phone and online.”
“AIST’s member funds have found that members who receive general advice leads to members being more engaged with their superannuation and can lead to members seeking more comprehensive personal advice. As evidence of this, many of our larger superannuation fund members would see more than 10,000 members a year through various seminars.”
“Unconflicted general advice continues to play an important role in engaging with members. This is particularly needed in these times when members are wary of financial planners, a wariness which has arisen from the many scandals arising from conflicted advice by planners employed by or associated with for profit superannuation funds and by bank tellers and other staff.”
