Could the government subsidise advice?

As hundreds of thousands of jobs are lost and retail investors panic about the continuing market volatility, Sequoia Financial Group has called on the government to subsidise the cost of advice for consumers.

“Never have we seen so many once financially viable businesses close their doors, so many people lose their jobs or lose a substantial percentage of their income,” said Sequoia managing director Garry Crole.

“While the government has announced some tremendous initiatives, which can assist many through this period, a lack of understanding on where to go or how to access these benefits compounds the stressful scenario faced by many.”

Sequoia flagged the government’s early superannuation release scheme as one area where consumers require ‘appropriate advice’ about the long-term consequences for their retirement, and noted that ASIC had already raised the alarm on unqualified people providing advice in this area.

“Never in our nation’s history has there been a situation where the need for professional financial advice is so crucial yet simultaneously inaccessible for some of the most vulnerable,” Mr Crole said.

Sequoia’s proposed benefit would be limited to super fund members with account balances under $200,000 or people aged above 50 facing a “significant change in circumstances”, and would be rolled out after consultation between advisers and the government.

“If the federal government and the planning industry could work together on this problem, I expect that planners would also commit to lower entry fees for financial advice so that all Australians could have the benefit of professional financial advice,” Mr Crole said.

“I believe a subsidy, in the form of a rebate, would support Australians in need of advice and increase the effectiveness of the various support packages, which is for the benefit of all Australians.”