FPA urges ‘pension advice allowance’

The Federal Government is being urged to emulate the United Kingdom by introducing a “pension advice allowance”.

The Financial Planning Association (FPA) has used its pre-Budget submission to the Treasury to advocate for the pension advice allowance at the same time as continuing its long-term campaign to have the Government legislate to make financial advice tax deductible.

The FPA submission, filed in December, noted that the pension advice scheme had been legislated in the UK in April, last year, and claimed Australia now had “an opportunity to promote superannuation advice as a mechanism to decrease reliance on the age pension”.

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 “This becomes more paramount as the first wave of baby boomers, aged between 48 and 67 years, are nearing or reaching retirement age,” the submission said. “Furthermore, older generations will be more accustomed to traditional wealth advisors rather than cheaper alternatives like automation advice.”

It said the cost of advice was being heighted by the increasing regulatory cost burden such as the fees charged by the Australian Securities and Investments Commission (ASIC) and service models.

“Hence, customers require a larger sum to cover the costs,” the submission said.

Outlining the shape of the scheme, the FPA submission said it would allow a superannuation provider, in limited circumstances to withdraw funds from a client’s investment product to pay for financial advice on their behalf.

However, it said this would only be permitted at the express request of the client.

“The provider reduces the value of the client’s superannuation by the amount of the advice fee, and transfers these funds directly to that client’s adviser,” the submission said

The FPA submission envisages an allowance of $1,000 to be accessed no more than three times by people in their lifetimes and free of tax at the time of withdrawal from their superannuation accounts

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The FPA needs to get out more;
a) One off Advice fees, including pension advice, can already be charged against many super/pension funds
b) Even ASIC says that comprehensive advice is between $2k and $4K.
Imagine what would happen if you could be a CFP without being an FPA member?
Now there's something that should be lobbied for!

Well said Long Term Cynic, the FPA are disenfranchising more and more of their members by idiotic out of touch comments like these

Love your work Long Term Cynic!

Seriously lets lobby for something that has been happening for the last 10 years. Probably a good way to chalk up a win.

I am going to start a campaign to have sliced bread in supermarkets. It will be amazing!

Am I missing something here? Is the FPA seriously asking for something the majority of super fund members can access (both industry and retail/platform)? Not only that but $1000 3x per lifetime? Could we please, just once have a professional body put forward an idea with some vague connection to reality?

Happy to eat humble pie if I have interpreted this correctly.

The FPA need to be put on a leash before they do even more damage to the industry than they have already in the past (Rantall's sell out for his pipe dream of 'enshrinement' which never eventuated once our future was handed over comes to mind, not to mention LIF and all the other fecal federal financial fundamentalism we've been force fed ).

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