One of Australia’s largest superannuation industry bodies, the Association of Superannuation Funds of Australia (ASFA) has backed Financial Services Council (FSC) calls for financial advice to be made more readily available using records of advice (ROAs) rather than statements of advice (SOAs).
The call has come as part of a six-step plan revealed by ASFA aimed at making productivity gains in a post-COVID environment, including moving all communication to electronic, centralising data reporting, addressing issues related to fund mergers and making it easier for members to make a contribution and to claim a tax deduction.
On the key question of financial advice, the ASFA position paper said that one of the factors that could make a significant difference to member outcomes in retirement was receiving financial advice but that that there were challenges that were impeding the efficiency of providing that advice.
ASFA said it was proposing the following advice model:
• an advice provider could provide a RoA rather than a SoA on specified advice topics, which reflect the most frequently asked questions by members;
• ASIC would provide a template RoA for advice that falls under this model to ensure consistency and to help ensure compliance;
• some topics covered by the RoA may also be categorised as intra-fund advice. It will be up to the superannuation fund to decide whether it will be provided as intra-fund advice or not; and
• appropriate records will need to be kept and provided to members and regulators as required.
“An average SoA costs a member approximately $1,500-$2,500, whereas an average RoA would cost a member approximately $300-$500. With the current cost of advice posing a significant barrier for members, the comparatively cheaper cost of a RoA would help make advice more accessible,” ASFA said.