Regulation delaying speed of super fund advice: Boal
Deloitte’s Andrew Boal believes digital advice delivered by superannuation funds is years away yet and will be hindered by the regulatory differences between financial advice and financial product advice.
Boal, who is partner-actuarial consulting at Deloitte, said super funds offering advice won’t be the solution to the financial advice accessibility problem in the short term.
Under the Delivering Better Financial Outcomes (DBFO) legislation, Minister for Financial Services Stephen Jones is pushing for super funds to provide advice to their members as a way to close the advice gap. This includes a new class of adviser called “qualified adviser”, who will have a lower barrier to entry than full financial advisers.
Last month, Cbus announced it will offer a financial advice offering for members and their partners called Advice Essentials Plus. This will charge members and their spouse $990 to access “internal financial experts”.
In an analysis article with his colleague Neil Brown, national investment and wealth management leader, the pair wrote about the ability and viability of super funds to successfully build a hybrid advice model.
“One problem is that for super funds to provide financial advice at scale, they will need to introduce a hybrid model where advice is delivered digitally as well as in-person. However, building these digitised financial advice businesses will take years and require substantial investment in digital technology and GenAI capabilities.
“This will be difficult for super funds to do at speed while also balancing industry consolidation, increasing competition, and ongoing political and regulatory pressures to keep fees low.
“To truly close the advice gap, more needs to be done to bring down regulatory barriers overall. For example, we believe there is an important distinction between financial advice and financial product advice, and this difference should be acknowledged within the regulatory framework, taking into account the likelihood and severity of any potential consumer harm.”
The pair also questioned current anti-hawking provisions and how super funds will be able to engage with members without considering the merits of their own retirement product.
Finally, they felt the provision of limited advice to address occasional needs, which will help with consumers’ financial knowledge, build trust and foster stronger relationships.
AUTHOR
Laura Dew
Recommended for you
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
In the run-up to heavy losses expected at the end of the financial year, June has already reported consecutive weeks of adviser losses.
ASIC has banned a former NSW adviser from providing advice for 10 years for investing at least $14.8 million into a cryptocurrency-based scam.
ASIC has sent warning notices to social media finfluencers who it suspects are providing unlicensed financial advice to Australians as part of a global crackdown by international regulators.
