Financial advisers should spend time doing pro bono work with underprivileged citizens as part of their continuing professional development (CPD) in a bid to reduce the advice gap.
Speaking to Money Management, ANZ financial adviser, Steve Donald, said the lack of support available for people in lower socioeconomic classes was a real problem that the Government needed to improve.
Changes such as making financial advice tax-deductible would have a positive effect on the economy in the long-term by reducing the Age Pension costs.
“There needs to be improved public services dealing with people in lower socioeconomic classes on establishing what they can afford to do. Websites like Moneysmart are great but they aren’t well-known enough and that should be something the Government focuses on,” he said.
“Could advice be subsided for people who are on benefits? Could advice fees for ongoing and upfront advice be tax-deductible? Small changes like this could be huge for the Age Pension.
“The people who need advice are the people who are unable to get it so what can we do about this? How about making people on their professional year spend some time giving general advice to people in need? Or it should be part of advisers’ CPD to spend one day a year providing a pro bono service. This would give out a positive message and help the community.”
Small changes he said people could make would be regularly investing $20 in their superannuation.
“Superannuation is not understood and people worry about being unable to access it but there is nothing more tax-efficient than super, even at the lower end,” he said.
“If you can find $20 for super then the ATO [Australian Taxation Office] will make a co-contribution. This is the type of thing that is not widely understood and doing small things now will help build wealth for later.”
