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Personal financial advice provided beyond advice within superannuation should be the domain of professional financial planners, according to the Australian Bankers’ Association (ABA).
In its latest submission to the Cooper Review into superannuation, the ABA has expressed concern that the Government’s regulatory changes via the Australian Securities and Investments Commission with respect to intra-fund advice had “created divergent rules applying to financial advice within and outside superannuation”.
The submission said that while the ABA supported the provision of accessible and affordable advice, individuals might hold assets both within and outside superannuation, and an approach that applied only to superannuation and not other investment products was problematic and likely to have unintended consequences for members and consumers as well as the financial services industry.
“Advice on superannuation may not always be simple, given that it can commonly be an integral part of an individual’s wealth creation and protection requirements and features as part of a more holistic financial plan,” it said.
The submission said the ABA believed financial advice that was valuable should consider the needs and circumstances of an individual beyond just superannuation — “That is, advice should include strategies to maximise superannuation contributions, private savings and wealth accumulation as well as to protect and maintain the ability to save”.
“Financial advice and estate planning should put in place strategies to manage an individual’s (and their family’s) financial affairs pre and post-retirement (and after their death) in a way that enables them to control their finances as their needs and circumstances change,” it said.
The submission said that, in practice, many aspects of advice relating to superannuation (ie, contribution levels, types of investments, benefit payments, etc) required an adviser to have a thorough understanding of an individual’s needs and circumstances, not just their superannuation savings.
“Therefore, the ABA supports the provision of general advice for members being provided via the member’s superannuation fund. However, personal financial advice should only be provided to members by professional financial advisers — that is, qualified, licensed advisers. The [cost and method of] payment for personal financial advice should be agreed by the member,” the submission said.
