Retirement
‘Detrimental’: Treasury’s income product plans draw fire
Treasury’s plans for proposed retirement income products to be designed for sale without a professional advice requirement could be bad news for retirees, a financial planner has said.
‘Detrimental’: Treasury’s income product plans draw fire
Treasury’s plans for proposed retirement income products to be designed for sale without a professional advice requirement could be bad news for retirees, a financial planner has said.
Speaking at the Financial Services Council summit last week, Department of Treasury retirement income policy head Robert Jeremenko said comprehensive income products for retirement (CIPRs) should be built to allow clients to purchase them without receiving advice.
The government is currently working with consumer and industry groups to develop CIPRs aimed at addressing super fund members’ needs in retirement through annuity-style products.
According to Mr Jeremenko, these products should be available for sale without a requirement for clients to seek advice.
“The government wants to establish this in a way that the offer of a CIPR would not be financial advice, so that means we need to look at what the definition of intra-fund advice is going forward to accommodate that,” he said.
“In and of itself, the offer of a CIPR is not financial advice.”
However, speaking to Nest Egg sister site ifa, Lifespan Financial Planning chief executive Eugene Ardino said deregulation of CIPR advice is “not in the public interest” and could be damaging for retirees.
He explained that while anyone can invest in a product without advice, regulators’ role is to dictate who can advise on certain products and who cannot.
“So, what Treasury seems to be suggesting is that it be possible for anyone to advise on these investment products, including the person trying to sell it,” Mr Ardino argued.
“If you go with this suggestion then you would have the sales team of a super fund trying to sell these products to retirees and I’m sure I don’t need to explain the problems with this model.
“If you want to structure CIPRs so that clients won’t need advice then structure them so that they are simple, which is difficult as they are complex instruments.”
He said it won’t be any easier to stop savers from receiving CIPR advice than to force them to seek advice.
“All you can do is decide who can and cannot provide that advice and there is just no good reason to say that anyone can advise on CIPRs,” Mr Ardino said.
In line with Rice Warner’s calls for CIPRs to be classified as financial products, Mr Ardino said they shouldn’t be available without advice from qualified advisers – and not super funds’ sales teams.
“Let the fund provide objective factual information, which is allowed of any financial product, but leave the advice to advisers,” he said.
RELATED ARTICLES
Retirement Planning
Majority of Australians anxious about retirement as super knowledge gaps persist, report finds
A new study by Aware Super has revealed that a significant majority of Australians aged 45 and over are feeling anxious about retirement, with nearly nine in ten respondents concerned they will run ...Read more
Retirement Planning
AMP’s MyNorth Lifetime boosts financial security and retirement income
AMP has reported that its MyNorth Lifetime retirement income solution is delivering significant financial benefits to retirees, with an average uplift of 50% in total income. Read more
Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more
Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more
Retirement Planning
Planning systems under scrutiny as Australia's ageing population grows
The Retirement Living Council (RLC) has called for governments to address planning system shortfalls in preparation for Australia's ageing population, following the release of new data from the ...Read more
Retirement Planning
Retirement Living Council calls for focus on seniors' housing as population ages
The Retirement Living Council (RLC) has urged governments across Australia to prioritise age-friendly housing solutions in response to new data revealing an ageing population. Read more
Retirement Planning
Macquarie University study reveals benefits of guaranteed income in retirement
A new study by Macquarie University's School of Psychological Sciences has found that mental health, enjoyment, and financial security are key benefits of incorporating guaranteed income and annuities ...Read more
Retirement Planning
Retirement villages offer affordable housing amid market crisis, study finds
Retirement villages are providing a significantly more affordable housing option for older Australians compared to the traditional property market, according to new data released today. Read more
Retirement Planning
Majority of Australians anxious about retirement as super knowledge gaps persist, report finds
A new study by Aware Super has revealed that a significant majority of Australians aged 45 and over are feeling anxious about retirement, with nearly nine in ten respondents concerned they will run ...Read more
Retirement Planning
AMP’s MyNorth Lifetime boosts financial security and retirement income
AMP has reported that its MyNorth Lifetime retirement income solution is delivering significant financial benefits to retirees, with an average uplift of 50% in total income. Read more
Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more
Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more
Retirement Planning
Planning systems under scrutiny as Australia's ageing population grows
The Retirement Living Council (RLC) has called for governments to address planning system shortfalls in preparation for Australia's ageing population, following the release of new data from the ...Read more
Retirement Planning
Retirement Living Council calls for focus on seniors' housing as population ages
The Retirement Living Council (RLC) has urged governments across Australia to prioritise age-friendly housing solutions in response to new data revealing an ageing population. Read more
Retirement Planning
Macquarie University study reveals benefits of guaranteed income in retirement
A new study by Macquarie University's School of Psychological Sciences has found that mental health, enjoyment, and financial security are key benefits of incorporating guaranteed income and annuities ...Read more
Retirement Planning
Retirement villages offer affordable housing amid market crisis, study finds
Retirement villages are providing a significantly more affordable housing option for older Australians compared to the traditional property market, according to new data released today. Read more
