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2022 advice review should focus on intrafund advice
The co-author of the Retirement Income Review, Dr Deborah Ralston, anticipates the financial advice review in 2022 will focus on intrafund advice.
Speaking on a panel at the Household Capital Three Pillars Forum, Ralston said the intrafund advice process needed to be streamlined.
“We need to give trustees comfort that when they're acting in the best interest of their members, that they have room to be able to do that,” Ralston said.
“Over recent years, we've had concerns probably through the Banking Royal Commission and through some other litigation that makes people a little fearful of doing what they really feel they should do.
“We need to straighten that out, particularly the intra fund advice, so that funds are able to do the job that they really need to do.”
It was noted that the Retirement Income Review did not consider the specific circumstances of in-demand individual members, and they were not required to consider other sources of income.
“Developing a strategy is not going to be easy; you can probably within each fund define particular cohorts and that ties into other legislation such as the design and distribution obligations, and also [the Australian Prudential Regulation Authority’s] APRA's requirements on member outcomes,” Ralston said.
“But at the end of the day I'm not sure that it's going to be possible to give as much guidance as you need without the ability to really engage on an individual level and I think there are things yet to be played out in that space.”
When it came to making super funds more confident to give that advice, Stephen Reilly, HESTA chief operating officer, said the hard part was going to be working together to deliver good advice.
“You lay out a predictable, understandable, preferably intuitive approach to what we can and can't do and I think it's fair to say we don't always have that,” Reilly said.
Dr Josh Funder, Household Capital chief executive and managing director, said the covenant was not a game changer but just a starting line that did not go nearly far enough.
“After 30 years of a system that's universal and compulsory, but still too focused on accumulation, a fund having a strategy and defaults for cohorts isn't going to deliver for the people who are in retirement or as forming of those, or the five million baby boomers who are in or coming up to retirement now,” Funder said.
“The retirement income covenant needs to go further and allow funds to deliver guidance broadly across all three pillars, the pension, superannuation and home equity, and to be able to deliver an individual strategy to a member who's been at that fund for many years and is looking forward to retirement for many years.”
Reilly said everything being done in financial services had moved towards more personalised and contextualised experiences.
“It gets interesting when you start to say, well, what do you need to try and solve that personal challenge,” Reilly said.
“We've got analytics to kingdom come, but it doesn't necessarily tell you about their household economics… how much equity they've got in a house. There's a whole lot of developments.
“Open banking is one where you can see a way to doing that, but we need to find a way to have this conversation with the member or the customer and that's the big challenge in front of us.”
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Ms Ralston, ASIC, ISA, Ms Hume & Frydenberg can all go and get stuffed.
It is so obvious that they All these clowns want to open up conflicted Intra Fund Sales Advice to cover all advice.
Conflicted Intra Fund Sales Advice paid for by HIDDEN COMMISSIONS.
Conflicted Intra Fund Sales Advice provided by call unqualified centre jockey’s.
Conflicted Intra Fund Sales Advice without BID, no real AFSL compliance, no FARSEA.
Conflicted Intra Fund Sales Advice selling only 1 vertically owned set of products.
WHAT A FREAKING SAD JOKE.
At the same time Real Advisers are totally buried under ever increasing BS Regs & Compliance at ever turn.
REAL ADVISERS ONLY HAVE 1 CHOICE AND THAT IS TO THESE CANBERRA BUBBLE BUREAUCRATIC MORONS TO GET STUFFED!!!!
Real Advisers must totally reject this rubbish.
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