AFA/ISA polar opposites on lifetime caps
The Association of Financial Advisers (AFA) and Industry Super Australia (ISA) are on opposite ends of the spectrum on lifetime contribution caps when it comes to improving women's retirement savings.
In its submission into the Senate Inquiry on the economic security of women in retirement, the AFA recommended considering the introduction of lifetime super contribution caps for low income earners, and those with broken careers due to caring responsibilities.
The AFA argued as contribution caps are based on a financial year period, it favoured those with consistent work patterns and disadvantaged those who take career breaks.
"We encourage the Government to consider the introduction of lifetime superannuation contribution caps for low income earners and those with broken careers to allow them the opportunity to catch up on lost retirement income contributions due to inconsistent work patterns," the AFA's submission said.
However, ISA said lifetime contribution caps would not improve women's economic security.
"…most women are unable to make any additional voluntary contributions to their superannuation, let alone the significant additional contributions required to make up the gap in retirement savings," the ISA's submission said.
"Very few women encounter a problem with contribution caps constraining their capacity to build their super. The far greater problem is that women don't have surplus income to put into their superannuation.
"They [lifetime caps] also introduce greater optionality and discretion in the timing of contributions, which typically benefit those with the means to exercise this discretion; in this instance, individuals with substantial wealth and income."
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
