Australians will get easier access to basic personal financial advice through their super funds, banks and insurers under federal government reforms.
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The shake up to financial advice rules should bring down the cost of no-frills financial advice, particularly for the five million Australians at or close to retirement.
A new class of adviser will be created that will be qualified to walk people through the basics, such as their eligibility for the pension.
They will likely work for financial institutions - including super funds, life and general insurers, and banks - and notably not be able to charge fees or commissions.
Assistant Treasurer Stephen Jones said this rule would "help restrict their advice to simple advice".
These advisers will still need to meet a government-mandated education standard, but the training will be less onerous than is necessary to give comprehensive financial advice.
"This will enable institutions to invest in these individuals to meet the scale that Australians need," Mr Jones said in a speech on Thursday.
In June, the minister flagged an expanded role for super funds in financial advice but said banks and insurers were a lower priority.
The new class of adviser was a recommendation from a review released earlier in the year that found it was difficult and expensive to get personal financial advice, with only 16,000 people qualified to provide it in Australia.
Financial institutions were found to be unable or unwilling to provide personal advice, offering general advice alongside a recommendation to seek a qualified advisor for something more tailored.
Mr Jones said he expected a significant response from the super sector to the reforms.
Only around a quarter of the many Australians approaching retirement are seeking advice despite often needing simple and one-off assistance.
"With five million Aussies at or approaching retirement with more money than ever before, these reforms will help people make informed and safe financial decisions," the minister said.
He also said 'fin-fluencers' on social media were filling the vacuum, exposing people to dodgy advice and in some cases, scams.
Super Consumers Australia acting director Gerard Brody said his organisation looked forward to digging into the details.
"Conflicts of interest remain real in any financial advice model which is provided by banks, super funds or insurers," he said.
"What we don't want is product sales dressed up as 'advice'."
Super Members Council executive general manager policy Mel Birks said the changes would allow funds to answer basic questions from members about retirement and pension eligibility.
"Super funds are trusted sources of information on super and retirement for their members and should be provided with the right legislative and regulatory tools to meet members' needs," Ms Birks said.
Legislation will be developed to implement the new model in 2024.
Australian Associated Press
