The Government has accepted a number of key recommendations of the Quality of Advice Review, paving the way for cheaper and simpler advice
In response to the Quality of Advice Review, the Government has announced it would accept, or in principle accept, 14 of the 22 recommendations and sub-recommendations included in the final report of the review.
The response paves the way for super funds to broaden their financial advice offering and make it cheaper for members to seek advice.
A key sticking point was the requirement to provide a statement of advice (SOA) to members for advice relating to their superannuation and retirement options.
The complexity of the SOA and time it takes to prepare the document added significantly towards the cost of advice, while many members find the statements hard to understand.
The Government has now said it would replace the SOA with an advice record to be agreed on after consultation with the industry.
“Statements of Advice will be replaced with an advice record that is more fit-for-purpose, with consultation to determine the final design of the replacement,” they said.
It also accepted a number of recommendations relating to the way members pay for advice, including one that allows for advice to be paid for from collective member fees.
“The restrictions on collective charging will be amended to allow superannuation funds to provide more retirement advice and information to their members,” the Government said.
AustralianSuper and the Australian Retirement Trust (ART) welcomed the response in a rare joint press release.
“At Australian Retirement Trust we know that financial advice has the power to materially change people’s lives and lead to better retirement outcomes for members, but that not enough Australians know who to go to or where to start,” Bernard Reilly, Chief Executive Officer (CEO) of ART said.
“These reforms will empower members to have greater choice in relation to how they access financial advice, whether that be through their super fund, digital channels or external financial advisers.”
Paul Schroder, CEO of AustralianSuper, said the reforms will improve retirement outcomes for millions of Australians with access to financial advice now easier and cheaper for members within the context of appropriate consumer protections.
“The removal of barriers on the provision of digital advice is a game changer, whether that is simple guidance to assist members in delivering an income in conjunction with the Aged Pension or more complex advice needs,” he said.
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