Consumer groups unite to warn against super early release

9 April 2020

Consumer groups have again urged people only to seek to use the Government’s hardship early access to superannuation regime as a last possible option and to consult a financial counsellor rather than an adviser.

The consumer groups - Super Consumers Australia, Council On The Ageing (COTA) Australia and Choice have issued a formal statement urging people to exhaust all other options before dipping into their super, pointing to Super Consumers Australia modelling has revealed that early access could cost people’s retirement balances the equivalent of $50,000 in today’s money. 

The modelling found that, for a 30-year-old, the impact of withdrawing $20,000 would be $49,823 by retirement age.

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The groups have also urged people to beware of scammers and people offering to help them take-up superannuation early access for a fee.

Super Consumers Australia director, Xavier O’Halloran said that taking out money before retirement meant losing the benefit of compound interest over a lifetime.

“Depending on how old you are, withdrawing money now could see you having to work much longer to make up the difference before you retire,” he said. “There are a number of financial assistance options to help people through these tough times. Super will be the right option for some, but you should be looking at what else is available and possible cuts to discretionary spending before raiding the cookie jar.”

COTA Australia chief executive, Ian Yates cautioned that people would lose tens of thousands of dollars in retirement savings if they withdraw their superannuation now. 

“One of the tragedies of the GFC was that people crystallised their losses by taking their diminished funds out of their super accounts,” he said. “They then had no way of growing them back and at the same time they lost the multiple tax advantages you get from having your savings in a superannuation account.”

“Our message is that if at all possible if your savings are in super, keep them in super. Even if you move your money into a more conservative option within your super fund, you can move it back into a growth fund later. But if you move it out of super, you may not be able to put it back in again.”

“It may not seem important now, but that’s many tens of thousands of dollars that you will not have to support you in retirement," says Yates.

 Choice Policy and Campaigns Adviser Patrick Veyret said if people were in financial difficulty, “we encourage them to contact financial counsellors, not financial advisers”.

“Financial counsellors offer a free and independent service. They can help people navigate through financial hardship, access government payments, and assist with any debt matters,” he said. “It will only be in very rare circumstances that a financial adviser recommending early access of superannuation is doing so in your best interests.”

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“It will only be in very rare circumstances that a financial adviser recommending early access of superannuation is doing so in your best interests.” says Choice.

Financial advisers are the only people who have a legal obligation to act in client's best interests. Financial counsellors don't. Accountants don't. Journalists don't. Book authors don't. Hate filled, ideological zealots masquerading as "consumer advocates" definitely don't.

what our professional bodies don't understand is they are dealing with people from the gutter. absolute scum of the earth.

failed persons.

FPA use the $8m in cash you have and it should be used in a brutal and violent way (metaphorically speaking) to attack choice and anyone else. if you want to fight with these people from the gutter, it cannot be from a Gandhian standpoint.

these people are the scum of the earth. they are not interested in anyone other than advancing their own ideologies.

we need to give them a fight they won't forget, below the belt where it hurts.

get it, gutter people, need to be inflicted pain below the belt. Do IT> NOW.

“It will only be in very rare circumstances that a financial adviser recommending early access of superannuation is doing so in your best interests.”
Wow. I guess these idiots with no qualifications are the experts. Not to worry, I'm not interested in helping - but I am getting the popcorn to see how Industry Super and their mates at Choice, ASIC etc unite to stop people causing liquidity issues at Industry Super.

me too. let them burn.

Dante, grow a set and have a serious go at Choice or your leadership is gone...time for a lack of faith motion.

choice, the most self-interested organization, least interested in the best interest of the consumer, most interested in benefits for themselves. unfortunately, they infiltrated ASIC with their filth. both ASIC and choice need to be gutted

thank god, that hideous kell has been rid of

Someone going to a "financial counsellor" will be expecting that they are getting personal advice, and would have no comprehension of the difference between general and personal advice. So is choice encouraging people to get personal advice from unlicensed advisers who are breaking the law. ASIC? Any comment?

that's right the consumer doesn't give a fuck about factual information, general advice, or personal advice. all advice to them is personal advice whether or not a fucking disclaimer is given beforehand and or factual information provided that can be objectively verified.

they will rely on that personal advice. from unqualified people. shouldn't be allowed.

personal advice can only be provided by a qualified and licensed financial planner in the legal form required, i.e. SoA.

shouldn't be allowed, it's illegal.

if I ever see a client who has received personal advice from these people I will personally fund litigation against these people

advisers are too passive, we need to get aggressive and ATTACK everyone.

Interesting and given their member profile, an industry super fund has made changes to their PDS for those seeking to switch, or access early withdrawal: "...changes had been made to the PDS of hospitality industry fund (name with held) between last week and this week, with section 5.17 referring to switches between investment options being processed “on every national business day” being replaced with a new section that allowed the trustee to “suspend or restrict applications, redemption's and withdrawal requests”. I would have thought a SEN would be needed for significant changes - apparently this is not a significant change.

Or could it be that there are some vested interests at play? Like perhaps industry funds struggling to meet liquidity demands to pay out their members' benefits?

I have negotiated debts for clients with banks and saved them thousands of dollars! For example a couple on centrelink disability benefits that owed over $40,000 in credit cards, with 4 different providers. I negotiated pay outs of $15,000 in full for these debts, I told the banks I would go directly to today tonight and declare the clients bankrupt if they didnt accept as they extended credit to two people on disability benefits that were never going to be able to pay it back. They accepted quick smart. This was even done pro bono! So yes Mr Choice numbnuts, tell them not to contact us. You covidiot you just dont know what you dont know do you. Tell you what if the AFA and or FPA dont come out swinging at this crap they are gutless covidiots too

And, you did all that work for free. good for you. another example of how much we do for the community all the while being spited each and every day.

a lawyer would have charged the client's a % of the difference saved i.e. $25,000 x35% = pocketed his fee.

or concocted some convoluted process to make at least $10k from these people's misery.

what about regulating the legal profession and their unbridled greed? these people are out of control and these failed people have infested choice and ASIC and want to take revenge for their failures in life on other successful people

Actually dhs I did recieve 2 x 10 packs of somersby semi sweet cider for my efforts. Of course it was put on my gift register and consumed with vigour! I did also get a few good referrals off the back of it as well.

And ASIC give these idiots funding, and let them sit in on their projects.... no wonder Advisers are copping a hiding. This is pathetic from Choice.

Surely the MySuper fees charged by Super Funds should provide this service to their members at no cost.

Satisfying the best interest of your client involves asking what they intend to use the money for - these are the Q's I ask my clients - which I would suggest Super Funds, consumer groups and Choice should be advocating.

(1) is it not better to access some of your Super now if it will keep a roof over your head - a no brainer - see also (4)
(2) if you want to access to simply buy things you don't need (new car etc) bad move
(3) if you want to access your Super and invest in a portfolio (outside Super) for your medium term life needs - not a bad idea.
(4) take it now - see what happens and you can always put it back in if the sky does not fall in.

Has anyone got a model that would demonstrate
(1) the impact of keeping your Super as is and defaulting on your loan - force sale of your house - and a lifetime of renting.
(2) this seems to be the standard model put out - using non inflation discounted future values.- the ones I've seen.
(3) not a bad model - and I have advised clients to do this as it provides a buffer for medium term life needs.
(4) you receive it tax free - you put it back tax free (making it tax free for life) - very interesting

Surely these would be the questions that should be discussed with a fund member (Trustee also have a duty of care to act in the best interest of members) or are they just content of protecting their FUM to get the Mysuper fees clip - and provide no service.

Where is Mr Hayne when he is needed. I'm sure he would like to earn another $1 million.

Mr Hayne sits on judgements of others.

well, Mr Hayne, we sit in judgement of you. you failed.

Choice is conflictedly protecting their ISA bed-friends, they know a decent adviser has no option but to recommend exiting entirely out of these farcical ponzi schemes as quickly as possible as part of the potential early access advice - how could you not?

Ethical and Hedware have been exceptionally mute of late, know we have all been praying for them to go away for years but interesting now that ISA have been copping a hiding, their rampantly zealous protector white knights are nowhere to be seen!!!

The CEO and Trustees of any Fund that denies access should do the honorable thing and resign.

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