Minister for financial services Stephen Jones believes super funds can be the source for boosting financial adviser numbers.
He has previously discussed in the government’s formal response to the Quality of Advice Review that super funds could provide financial advice to their members. However, advisers have been concerned those providing that advice will be less qualified than full financial advisers.
“Super funds need tight governance and regulation around the scope of advice they can provide, how its charged and the qualifications required of the people providing it. They will have narrower qualification and a narrower scope of advice,” Jones said.
“I think if we get it right, and we are determined to, then we can create a new pathway for someone who has part of the qualification to then move through to become a fully-fledged financial planner. We’ll do it in a really positive way so there is a logical pathway for someone to start at a super fund and then go to work at a licensee which gives them the incentive to complete the full qualification.”
The number of advisers has fallen below 16,000 although losses this year have been significantly fewer than in previous year.
The decision to push for super funds to provide advice has received a mixed response from the industry but Jones reiterated his stance and called for super funds to “step up” their actions in the space. He referenced Michelle Levy’s Quality of Advice Review and the Retirement Income Review as having persuaded him on the need for financial advice on retirement income.
Speaking to Money Management, he said: “[Super funds] are on a journey and need to step up they service they provide. They are not there yet.
“These reviews made it quite clear to me that we have got a big problem. If the answer to that was everyone seeing their neighbourhood financial adviser then I would have done that but it isn’t because there are only 16,000 of them and they have a business model that is not appropriate to answering that need. Most Australians have needs that are much more simple and we need a different model.
“The existing business model isn’t working, we need the legislation and the regulation put in place to facilitate a new model that is a safe, professional and available.”
