There is an opportunity for alignment between superannuation and financial advice but not until the industry is truly independent, according to minister for superannuation, financial services and the digital economy, Jane Hume.
During Industry Super Australia’s ‘Brighter Future for Members’ webinar, Hume was asked whether super funds could provide free financial advice to members through salaried employees.
Hume said the advice sector had seen significant reforms over the last decade and would continue to do so.
“It’s essentially moved from a sales industry to a profession and that’s been a very uncomfortable journey for an awful lot of those that are within the industry, but it’s been an important one,” Hume said.
“I think now there is great opportunity to see far better alignment between superannuation [and the advice sector], particularly once we get to that deaccumulation phase, but the advice sector still has a few ways to go.”
Also answering the question, Labor’s shadow assistant treasurer, Stephen Jones said he was “intensely uncomfortable” with the model suggested in the framing of the question.
“I’m not going to rule it out but I’m intensely uncomfortable with the model that had been suggested [by the question],” said Jones.
“The Hayne Royal Commission showed all of the conflicts that exists through vertical integrated organisations where the adviser is attached to the fund… therefore the momentum and incentive of value capture is immense.
“And I think it would be naïve to think that that is only a problem in the retail sector, and it wouldn’t, if we extended that right throughout the industry, be a problem in the industry sector.”
Replying to Jones, Hume said she was well-aligned with him on financial advice being a highly independent profession.
“It’s taken a long time to bring them here, let’s not lose it now,” Hume said.
Jones said it was just as important to get the advice component of super regulation right as it was to get the Retirement Income Covenant and decumulation right.
“The advice sector is in turmoil, the old business model is stuffed, the new business model hasn’t been created yet,” he said.
