There needs to be more financial advice within superannuation and the Government and the regulators need to think about amending many of the restrictions and impediments to the delivery of that advice.
That is one of the key bottom lines of a roundtable of superannuation industry executives conducted by Super Review, with the consensus being that financial advice needs to be an integral offering to superannuation fund members.
However, for some superannuation fund executives such as NESS Super chief executive, Paul Cahill the advice offered by actual funds should only be “in the areas they need to offer advice”.
“Funds should not be offering financial planning services for negatively gearing properties and things like that,” Cahill said. “We need to be able to service our members and that means taking members from work-based accumulation to building up a balance in retirement and then across the bridge into retirement.”
“So, the advice model should fit around what we need to do to help our members,” he said.
However, Deloitte superannuation partner, Russell Mason said he saw things differently and pointed to the declining relevance of the sole purpose test.
He said many superannuation funds had become financial institutions in their own right and on that basis he would like to see funds and the financial advisers they employed allowed to deliver a broad range of advice.
“I would like to see the funds and the advisers they employ able to give advice that covers my entire financial situation, not just one element of it which may be superannuation, which is likely the most important element,” he said.
“I want to be able to get advice that my partner and I can work together on and look at our retirement in a holistic point of view, not thinking that they can only advise me on super now,” Mason said. “Where do I go to get advice about other things?”
“So, I think financial planners in the area of super have largely had one hand tied behind their back. I'd like, within the realms of reasonableness, for them to have a greater degree of flexibility. To advise me on the situation without this artificial distinguishing between super and non-super.”
TAL chief commercial officer, Andrew Howard said that it was a fact of life that people contacted superannuation funds seeking simple advice and then were prompted to seek more complex advice and those situations needed to be addressed.
“The funds need to be able to go beyond education and help members act upon their financial future and advice is key to that,” he said. “And so there will be transitions where people go from no insurance to having insurance, size that insurance up or size it back down and we haven't talked about retirement income yet.
“With the retirement income journey and the retirement income review we get into longevity type solutions. These are these are more complex questions for people to answer and there needs to be the ability for funds to help people make those transitions.”
“So, I think the role of advice in superannuation is really important. It will be different fund by fund as to whether they sort of stick to the journey or whether their members needs could be served by more holistic financial planning and I suspect that's a fund by fund question,” Howard said.