Super choice hype missing the point - FPA
Fee comparisons are being overemphasised in the lead-up to choice of fund, according to the Financial Planning Association (FPA), which claims most debate on the new rules is missing the point.
FPA Superannuation Committee chair, Louise Biti, said the debate centring on fees had distracted from “the most critical considerations for Australians when considering superannuation”, they being individual long-term savings strategy, fund performance and insurance.
Biti said consumers could be misled and confused by statements and claims emerging in the debate.
“To attack financial planners and accuse them of recommending change for change’s sake is not in the interests of super fund members and is simply incorrect,” she said.
“It is the FPA’s view that the vast majority of fund members will have no reason to change funds in the short term, and certainly not without very careful consideration. Funds can be changed at any time in the future and when it is in the best interest of investors - not just on July 1 2005.”
The FPA’s comments come less than a week after fund manager, Advance Asset Management, criticised the media and marketing hype around super choice and warned consumers against rushing into decisions.
The Australian Securities and Investments Commission and the Australian Taxation Office have also weighed in, joining forces to inform consumers about self-managed superannuation funds and issuing a fact sheet aimed at clarifying the rules and requirements of such funds.
Self managed super funds are already gaining popularity and this trend is likely to continue after July 1 according to a recent poll conducted by Money Management of 140 financial planners, fund managers and platform providers.
Biti stressed the importance of advice for consumers in their decision-making on superannuation.
“Some fund members, especially those nearing retirement or starting to think seriously about their long-term retirement savings strategy and retirement income, may well need advice that cuts through the general clamour and focuses on their own individual circumstances. Such advice has value and investors should be prepared to pay for it,” she said.
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