Australians approaching retirement will now find it easier to get basic financial advice, thanks to new government reforms. The changes are designed to make simple financial guidance more affordable, especially for the five million people nearing retirement.
As part of these changes, a new type of advisor will be available to help with basics like understanding pension eligibility. These advisors will be associated with financial institutions, such as super funds, insurers, and banks, and the best part is, they won’t charge any fees or commissions. This positive step aims to make financial guidance more accessible, ensuring a smoother and more enjoyable retirement for everyone.
While these advisers must still meet government-required educational standards, the training they undergo will be less demanding compared to what is needed for providing comprehensive financial advice.
While announcing the reforms on Thursday, December 7, Assistant Treasurer Stephen Jones said that “when Australians cannot access the advice and information that they need and want, this is a failure of the system” but that the new breed of financial adviser would “enable institutions to invest in these individuals to meet the scale that Australians need.”
Today I have announced a comprehensive reform package that will mean more people can access financial advice, including access to advice on simple matters from financial services groups like superfunds, insurers, and banks at no charge. pic.twitter.com/gUe5U5Eqzq
— Stephen Jones MP (@StephenJonesMP) December 6, 2023
The idea for this new type of adviser came from a review earlier this year, which found that getting personal financial advice was tough and costly. In Australia, only 16,000 people were qualified to give such advice.
The review also revealed that financial institutions were not offering personal advice, instead giving general guidance and suggesting people find a qualified advisor for more personalised help.
Jones is hopeful that the changes will be well-received by the super sector. Surprisingly, even though many Australians nearing retirement could use simple and one-time assistance, only about a quarter of them seek advice.
“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,” Jones said.
Super Members Council executive general manager policy Mel Birks welcomed the reforms, telling AAP that 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,” Birks said.
Plans are underway to craft legislation that will put the new model into action come 2024.
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