UPDATED: Australians will have access to affordable and reliable financial advice paid for from their superannuation for the first time under reforms announced by the Australian Government.
Assistant Treasurer and Minister for Financial Services Stephen Jones said he would create a new category of diploma-qualified financial advisers who could give limited financial advice at an affordable price.
He said they could provide advice on products issued by prudentially‑regulated entities but not on more complex topics, such as establishing a self‑managed superannuation fund or advising on a managed investment scheme.
He plans to change laws to clarify which advice type of advice can be paid for through super funds’ members retirement savings, allowing the funds to charge members directly or collectively with a fee on all members or to outsource advice.
Research showed four in five Australians aged 45-54 needed financial advice but could not afford it, while 74% aged 18-34 had unmet advice needs.
“Millions of Australians are unable to get the financial advice and information they need. It is too expensive and strangled by red tape,” Jones said in a statement.
“Without affordable advice, Australians will either get no advice – which leads to lower standards of living – or seek advice from dodgy sources and scammers. The status quo of the financial advice laws is unacceptable.”
Jones was announcing the second tranche of the Delivering Better Financial Outcomes package.
Jones said Australians could not access advice from their super fund about their retirement options due to reforms introduced after the banking royal commission.
“There's about five million Australians either at or approaching retirement, and they're not getting access to affordable, reliable advice," Jones was quoted as saying.
"That's the nut we've got to crack. How do we ensure the vast majority of Australians who have thousands, not millions, of dollars in their [retirement] savings can get some sensible, scaled advice which is appropriate to their circumstances at an affordable price."
The announcement was welcomed by peak bodies in Australia’s $4 trillion superannuation industry.
Association of Superannuation Funds of Australia CEO Mary Delahunty said: “Today’s announcement is a meaningful investment in the financial wellbeing of Australians.”
Super Members Council CEO Misha Schubert said: “Getting more Australians low-cost but high-quality financial advice is the missing piece of the retirement puzzle and this announcement is welcome progress in addressing the advice gap.”