The Australian Minister for Financial Services, Stephen Jones shared the government’s view on the Quality of Advice Review (QAR) recommendations at a breakfast event in Sydney on 13 March 2023.
The ability for Australians to make sound decisions about their money in retirement was highlighted as a key focus.
Details about which recommendations the government is planning to implement were limited, but one thing was clear from this presentation: the government expects super funds to play an increased role in providing advice to their members, in particular the 5 million who are at or nearing retirement.
Under the Retirement Income Covenant (RIC), superannuation trustees have an obligation to ensure they are taking into account the retirement income needs of their members. However, as Mr. Jones highlighted at this event, the regulatory path for super funds to meet these obligations is “almost impossible.”
Bravura’s response to the review
Bravura welcomes the customer-centric nature of the Quality of Advice Review final report.
Currently, a whole segment of the market is locked out of advice due to prohibitive costs, a problem which is exacerbated by the fact that most personal advice services are too sophisticated for the simple advice needs of the average consumer.
Broadening the scope of organisations that can provide advice and encouraging super funds to offer advice services is an opportunity to fill the consumer advice gap.
Digital advice as a key enabler
The role of digital advice has been called out in the report as a key enabler to increase affordability and accessibility of financial advice.
Bravura believes that digital advice technology will play a pivotal role in increasing the reach and relevance of financial advice and improving efficiency in advice processes.
In fact, this is already happening. Our digital advice technology already underpins member and adviser-led advice services, predominately intra-fund advice, for 12 superannuation funds.
Digital advice will complement, not replace the role of a professional financial adviser; facilitating advice for consumers with simple needs whilst delivering a path to comprehensive advice through client engagement tools and advice enablers delivered by professional advisers.
Where to from here?
Mr. Jones was unable to provide a timeline for implementing any of the review’s recommendations, although he did indicate he plans to ‘give a lot of clarity’ to the industry this year.