Advice system needs to focus on what consumers need

A more customer centric advice framework is needed to help consumers receive trusted and professional advice, according to the SMSF Association.

Speaking at an event in Sydney on Thursday, the association’s chief executive, John Maroney, said the level of complexity in the financial services system paired with the continued volatility in investment markets, where most of the risk sits with the individual member, was stressful for retirees.

“Although some longevity protection is provided by the Age Pension for those with modest assets at retirement, or at older ages, for many retirees it is very difficult to share or manage their retirement risks,” he said.

“Consumers want affordable advice, delivered with the help of sophisticated technology, via a system of open superannuation similar to the open banking environment with clear consumer data rights.”

Maroney said as the advice procession would gradually use real-time data that was readily available for consumers and could be shared with their advisers.

He noted that initial advice could become a half-hour discussion.

“…we believe more effective regulation can be developed in practice and can be much better by focusing on what consumers really want and need. Mechanisms are needed whereby most Australians can have access to affordable advice with significant trust in the system,” he said.

“This will require continued advancements in technology, rebuilding in trust from all participants in the financial system and from focusing on what is in the best interest of the consumer in reality instead of theory.

“Protecting retirement savings and financial health of all Australians is at the forefront regardless of which forms of retirement savings are chosen.”