Investor education remains gaping hole in reforms
|
|
If the Government and the industry continue to focus on lowering fees without addressing investor education levels, investors are going to end up even worse off, according to Australian Unity group executive for investments David Bryant.
At a luncheon in Melbourne, Bryant noted that there was no discussion from the Government and the industry regarding educating investors about super and investments.
There hadn’t been a single suggestion in all of the reviews to fix investor education, Bryant said.
In a later interview with Money Management, Bryant said that if the Government was going to raise the super guarantee, both the industry and the Government needed to fix the problem of investor education.
“The two things that people are concentrating on are price and choice, and if we are serious about going to 12 per cent super, we’re talking about very substantial sums of money, and if we focus only on price and not on quality then people are going to end up far, far worse off, because the emphasis is on the wrong point,” he said.
Bryant also warned that proposing a broad “mechanical setting” for super to serve a wide audience was fraught with danger because it would not suit everybody.
“Teaching people that the only thing that matters is the price ... is a very poor point of focus and really needs to stop being the centrepiece,” he said.
Better investor education would also reduce the need for more legislation, and the industry would no longer need to deliver “dumbed down” solutions to investors, Bryant said.
Maximising super was a combination of what you put in, which fees you pay, and even more importantly, how well it performed, he said.
Bryant suggested that instead of pushing fees down, super funds should “redeploy” their super fees to place a portion of their total revenue in investor education.
If the industry educated investors, it could solve all the problems it was dealing with, he said.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
