FSR running contrary to affordable advice

Richard Gilbert

The latest parliamentary report into the superannuation industry has received a mixed reception from the major players, with some deep divisions remaining over questions such as the role of financial advice.

This is despite the fact the report of the Joint Parliamentary Committee on Corporations and Financial Services found that the Financial Services Reform Act had “limited the affordability and availability of straightforward advice on superannuation”.

The committee also said it believed that “while the consumer protection objectives driving the reforms were appropriate, the overall effect of FSR limiting access to superannuation advice has exceeded any consequential benefit to consumers”.

The divisions in terms of industry responses to the committee report came because of the committee’s view with respect to the role of commissions in the provision of advice and its belief that promotional advertising by superannuation funds be subjected to an appropriate compulsory accounting standard.

Commenting on the committee’s findings, chief executive of the Investment and Financial Services Association Richard Gilbert said the report represented a useful stocktake of the superannuation industry.

He said the report had highlighted the very competitive nature of the superannuation industry and especially the need for good financial advice.

“The implementation of an effective disclosure policy is an issue IFSA is working hard to address, along with the recommendation for the improved readability and standardisation of superannuation product disclosure statements,” Gilbert said.

The Financial Planning Association (FPA) claimed the report reflected bi-partisan support for the value of advice and highlighted the need for all Australians to access affordable advice particularly on super.

The chief executive of the FPA, Jo-Anne Bloch said, however, that the FPA was concerned about any extension of the current exemption for accountants and recommendations they can give regarding self-managed superannuation funds.