The scheme would allow people who lose their job to withdraw up to $20,000 from their superannuation in two rounds – $10,000 before 30 June and a further $10,000 from July.
But the Financial Planners Association (FPA) said that early access to retirement savings come with strict conditions – limiting access to those who are unemployed, have had their working hours/businesses income reduced by 20 per cent, or are on Centrelink payments – and that people experiencing hardship speak to an adviser before they withdraw funds.
“Superannuation access should be used as a last resort,” said FPA chief executive Dante De Gori.
“It is to be used to fund retirement and its primary purpose must be respected, even in these increasingly uncertain times.”
The FPA recommends that anybody who meets the requirements consider whether using their retirement savings is really their best option.
“If you have a financial planner you should speak to them first about how to manage your financial situation at this time,” Mr De Gori said.
“For those who do not have access to a qualified financial planner, they should consider all their options such as speaking with their bank, utility providers, landlord and other service providers to see what relief and other options are available to you before you decide to access your super.”
The FPA has seen a spike in the use of its Match My Planner service as more Australians look for a CFP professional to help them. However, Mr De Gori said that some people may need to access their super and should do what’s best for their immediate financial situation.
“But obviously if you need to access your super you should and if possible, make a promise to yourself to replace what you access when your situation turns around in the future,” he said.
what would you tell them for $2,000 and an SOA, dont touch your super ? What then would be the alternative ?
You wouldn’t be able to prepare a SoA in time
People suffering financial hardship and considering withdrawing monies from their super fund should contact ASIC and ask how they can afford to obtain professional financial advice beforehand.
I would consel Mr DeGori to get of his High Horse and ponder the question “if a person is in need of accessing their Superannuation Balance due to Financial Hardship, and presumably to meet outstanding Bills – how on earth is he going to afford a Financial Adviser at today’s going rates?” You advocated for FEE FOR SERVICE and the Compliance and Regulatory Regime that followed it. Now lets see if the Service Fee can be afforded by those that most need it!
Its a telling point that Dante is not recommending those without a Financial Adviser go and find one for this advice. Instead the counsel is “speaking with their bank, utility providers, landlord and other service providers” The FPA CEO knows that the red tape Financial advisers have to comply with make it impossible to provide advice to a new client on this issue for under at least $1,000. It should not be so and regulation needs a serious review. Advisers should be well educated, skilled and ethical….. and once screened and qualified should be allowed to get on with providing advice when needed without having to dance through onerous compliance obligation to the TPB, ASIC, APRA, AUSTRAC, their Professional body etc etc etc. Lets hope this crisis does have some sort of silver lining for advice and some of the more ludicrous red tape is removed. (starting with TPB registration and pointless AML paper warfare and three different codes of conduct)….
Ha ha they can come to me, I’ll have to charge them at least $2,000 and then take a month to prepare a document. My advice will be don’t do it.