One-size-fits-all unsuited to planning

A one-size-fits-all approach would be inappropriate to the provision of financial advice within superannuation, according to major financial services house Perpetual Investments.

In its submission to the second phase of the Cooper Review, Perpetual referred to interviews it had conducted with large numbers of financial advisers across Australia — both within the Perpetual group and from outside.

“One theme emerging from these interviews was the strong role that financial advisers play in motivating clients to save for their retirement and encouraging them to have a long-term perspective on wealth creation,” the submission said.

It said the interviews also highlighted the need for financial advice to be appropriate to each individual client’s situation.

The submission said these interviews had helped Perpetual form the view that low-cost default superannuation alternatives would not be an appropriate solution for many clients to maximise retirement income.

“The large current reliance on default options evidences a need for more policy emphasis on encouraging engagement, rather than further extension of a one-size-fits-all approach, even if it incorporates a lifecycle approach to asset allocation,” the submission said.

“Perpetual is concerned that such an approach could increase, rather than diminish, levels of passive engagement with retirement savings and promote dependence on government funding of retirement.

“We believe that maximising accessibility of appropriate advice for investors is the most important factor to address current levels of disengagement and the use of default funds.”