The centrality of good financial advice
When Money Management’s sister publication, Super Review, conducted a Post-Retirement and Ageing Forum in Sydney, it served to underline why the superannuation sector needs to work more cooperatively with the financial planning industry.
What became very clear, very quickly was that financial advice must be central to any strategy aimed at Australia overcoming the challenges associated with longevity and an ageing population.
Indeed, the forum suggested that if the Government actually moves to lift both the pension and superannuation preservation ages, then it will be vital that those affected receive appropriate advice to navigate what could prove to be a complex transition.
The forum also acknowledged that superannuation funds, utilising advice services, were excellent vehicles for continuing to meet the needs of members post-retirement via the provision of appropriately-structured product offerings.
Given these facts, it seems ironic that for most of a decade a section of the superannuation industry financed a television advertising campaign which served to undermine the public’s perception of the value of advice provided by planners.
While it is true that the “compare the pair” advertising campaign was originally predicated on ensuring the survival of industry superannuation funds in the “choice of fund” environment introduced by the former Howard Government, it is also true that it evolved to become a quasi-political attack on planners remunerated by way of commissions.
Further, even when the Financial Planning Association and other industry bodies moved to end commission-based remuneration, the campaign continued with all the implications it held for public perceptions of financial advisers and the advice they provide.
While there is a good deal of politicking associated with Federal Treasurer, Joe Hockey’s discussion of the age pension regime in the context of Australia’s broader economic capacity, there is also the reality that he is traversing issues already identified in successive Treasury Intergenerational reports.
There is essentially no argument about the cost to Australia of an ageing population or the need to encourage people to save more for their retirement and to work longer if they can. What is at issue is how these objectives can be achieved.
The provision of sound and timely financial advice is, it seems, a vital component.
It is therefore vital that the old “them” and “us” mentality which gave rise to the “compare the pair” advertising campaign be abandoned, with the superannuation and financial planning industries agreeing that it is in their mutual interests to appropriately service and support clients and members both before and after they have retired.
While the Federal Government can do much to address the post-retirement challenge, a good deal of pressure on the age pension can be relieved by ensuring that people receive the right advice at the appropriate time.
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