How to make financial advice more affordable

By Grace Ormsby

August 14 2020
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Recognising that financial advice needs to be made more readily available to Australians through their super funds, one advocacy group is calling for the widespread uptake of a “record of advice” instead of the commonly used “statement of advice”.

How to make financial advice more affordable

The Association of Superannuation Funds of Australia (ASFA) has called for increased productivity and efficiencies within the Australian super industry and has developed a “six-step plan” for post-COVID-19 gains.

It wants to make advice more accessible to members, noting that “one of the factors that can make a significant difference to member outcomes in retirement is receiving financial advice”.

Acknowledging that current challenges do impede efficiencies of providing advice and can make advice less accessible and unaffordable for the average person, ASFA has proposed that members’ most frequently asked questions should be able to be answered through a record of advice, or an RoA.

This is instead of an industry standard statement of advice (SoA).

An average SoA costs a member approximately $1,500-$2,500, whereas an average RoA would cost a member approximately $300-$500, ASFA explained.

“With the current cost of advice posing a significant barrier for members, the comparatively cheaper cost of an RoA would help make advice more accessible,” it said.

According to the advocacy group, questions that could “easily” be answered through an RoA include:

Should I stay invested as I am or move my money to a different investment option?
My account balance has dropped, what should I do?
How do I set up a pension account?
Can I claim a tax deduction on my contributions?
How much can I contribute into my superannuation?
How do I withdraw my superannuation under compassionate grounds?

ASFA is proposing that an advice provider would provide the RoA instead of an SoA on specified advice topics, with a template provided by ASIC to ensure compliance and consistency.

While some topics covered by an RoA may be categorised as intra-fund advice, ASFA believes it would be up to the super fund to decide whether it will be provided as intra-fund advice or not.

A move to RoAs would require appropriate records to be kept and provided to members and regulators as required.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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