The Federal Government’s proposed reforms to widen access to financial advice will be a “game changer” for how Australians interact with their super, according to one of the nation’s leading funds, Aware Super.
Aware Super CEO Deanne Stewart said the reforms announced today recognised the urgent need for high-quality, personalised financial advice for Australians approaching and moving through retirement.
“These reforms are a great start to making high-quality advice super helpful to the five million Australians either already in or preparing for retirement – including more than 100,000 Aware Super members who will retire in the next five years,” Ms Stewart said.
“Implemented well, the Government’s proposed reforms will allow us to truly change the way we help our members by making it more straightforward for consumers to be able to ask simple questions of their super fund and receive clear, personalised answers on the spot instead of having to wait days or weeks for an appointment.
“This would be a game changer for the way Australians interact with their super.”
The Government has announced the reforms in response to the Quality of Advice Review chaired by Michelle Levy, a partner who specialises in financial services at law firm Allens. Assistant Treasurer and Minister for Financial Services Stephen Jones said the Government would adopt most of Ms Levy’s recommendations.
The objective of the review, which was commissioned early in 2022 by the previous government, was broadly to establish ways to make quality financial advice more accessible and affordable.
Ms Levy handed her report to the Government in December and it was released publicly in February.
Mr Jones said the reforms would be rolled out in three “streams”, under a program called Delivering Better Financial Outcomes. The first stream is focused on removing red tape to reduce costs, while the other streams are targeted at expanding access to retirement income advice and exploring new channels for providing advice.
Ms Stewart said Aware Super’s research showed a clear difference in retirement outcomes for members who received advice, compared with similar members who didn’t. Members who received advice were more likely to draw on their savings as income in retirement, and also made “nearly two and a half times greater voluntary, tax-efficient contributions of non-advised members”, Ms Stewart said.
Advised members “consolidated twice the average amount of superannuation from other accounts”, she said, noting that consolidating super accounts could help members simplify their finances and avoid paying multiple sets of fees.
“And our advised members report feeling more confident about their financial position heading into retirement, which can mean they’re more comfortable spending from their super savings.”
Mr Jones said legislation for the proposed reforms would be developed over the coming year.