Review needed on CIPR advice requirements

CIPRs

3 May 2017
| By Jassmyn |
image
image
expand image

Requirements for scaled and intra-fund advice need to be reviewed to determine whether modification of further guidance is needed to facilitate the provision of comprehensive income products in retirement (CIPRs), according to a committee.

The Committee for Sustainable Retirement Incomes (CSRI) said pre-retirees no later than age 50 would need guidance around CIPRs.

CSRI’s latest policy engagement report said while most retirees preferred to not rely on expensive personal financial planning advice, they needed iterative engagement as they considered when they intended to retire, or transitioned to retirement, and whether to vary their voluntary contributions to achieve their target retirement income.

It said strategies to increase the role of financial advice in relation to retirees managing their super balances included:

  • Ensuring training of advisers in relation to retirement related matters, such as annuities, Age Pension, and aged care funding;
  • Setting standards for financial advisers who were advising on retirement matters to ensure competency across the complexity of retirement issues; and
  • Regulatory settings to facilitate the rapid evolution of digital advice in retirement matters.

CSRI said the challenges for CIPRs were not only about product design but also the obligations of trustees, and protections for trustees, the regulatory retirements for the product offers, and the degree of compulsion on funds to offer them.

“The process will only work well if tax and transfer settings in retirement complement the arrangements for superannuation in the accumulation phase, and are sufficiently stable for the purposes of planning and for decision-making at retirement,” the report said.

“The superannuation funds are the central players in this, but it is vital that the consumer voice is heard and is given first priority. The aim has to be to make our defined contributions based system look much more like a defined benefit scheme.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

13 hours ago

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 18 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 16 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 19 hours ago