Choice of superannuation fund will only be effective if superannuants have access to quality and timely financial advice, according to major accounting group, Chartered Accountants ANZ (CA ANZ).
In a submission filed with the Senate Economics Legislation Committee review of the Government’s new choice of fund legislation, CA ANZ pointed out that despite the need for financial advice, ASIC research had revealed that only 27% of the Australian population had received personal financial advice.
It said despite this, many potential financial advice providers were “dissuaded from offering advice because of complex costly inefficient regulatory frameworks”.
“In addition, multiple regulatory regimes together with regulator behaviour have been forcing many professional advisers (accountants and financial advisers) to question whether they should continue to provide advisory services,” the submission said.
CA ANZ then flagged new research it had conducted which it said suggested that few people used digital platforms or robo advice, with only about 12% of consumers having heard of robo-advice.
“The main attraction of this option is that it may reduce the cost of providing advice and allow widespread access,” the submission said. “But it would appear only a minority of people would consider using this service.”
“The majority of consumers are saying they want to receive financial advice from another human beaning. This means reform of this area is essential and urgent.”
Comments
Unless there is a major wind back of the regulatory imposts on advisers, millions more investors will be thrown into an investor "economy" class category, never being able to access advice - but still paying for it via hidden admin fees. Just appalling for fund members. Within 5 years time, it will become abundantly obvious how bad things will be.
By winding back 'regulatory imposts' you mean going back to the wonderful laissez-fare days pre the Royal Commission and so leaving the economy class punters exposed to whatever nefarious practices and fees of the banking, finance and advice industries. The advice industry with its lame professional bodies bought the regulations upon itself.
But I do agree that the whole SOA stuff is a waste of time and ineffectual for both sides.
Yes, it was so wonderful back then that the little guy could actually obtain access to advice. No longer. One step forward, ten steps backwards for the untouchables.
They even got advice when they were dead. Excellent service no doubt.
I thought Industry Super continue to charge people for advice that is not delivered - even in death? Tell me they dont.
Yes, obviously winding up an estate [the time frame of which is out of the hands of an adviser] should be done for free. Obviously legal eagles that provide deceased estate services (who made this such an issue during the RC) want to keep all the profit for winding up estates all to themselves. The hypocrisy on this particular issue from the RC was breathtaking.
Hedware, I believe you refer to the old system of being renumerated from product? That system is alive and doing very well thank you. In case you have not kept up, this type of behaviour has been outlawed for privately owned financial planner practices only. Product owned advise has a green light.
Our Advisory Business sadly found that many clients were unwilling or unable to pay for Financial Advice at a level which was commercially viable for our business, predominantly due to the high regulatory time cost and overall general cost. As such we took the commercial decision to "orphan" unprofitable / unwilling clients and focus on only servicing the top end of clients. This has now created an unadvised, under-insured, uneducated "Cattle Class" which will perpetuate throughout Australia. The unintended consequence of Politicians and Lawyers ill informed wishes.
As the "cattle class untouchables" realise that all the regulatory "protection" has rendered them advice-less, this will eventually become a new political problem for this "Fraser-Lite" Coalition Govt. And we are busy educating the public what a grand legislative mess have been imposed on them. They are slowly waking up to the fact that they are now unable to access cost-affordable advice, due to this Govt capitulating to the left-wing consumer lobby.
What's the point of all the red tape if no consumers are using it because they can't afford advice!
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