Jones reiterates support for super funds in advice

Speaking on ABC Radio Brisbane on Tuesday, Financial Services Minister Stephen Jones said there aren’t enough financial advisers to give the right kind of advice.

“I’m looking at this and I’m working out how can we get more advisers into the industry, but also how can we get more information and advice?

“So I’m looking at superannuation funds as a likely candidate,” Mr Jones said.

He elaborated that Australians should be able to pick up the phone and ring up their fund to ask for simple advice such as whether they have enough super for retirement, and how that interacts with their pension.

“And the funds, because of the laws we’ve got at the moment, say, ‘Sorry, we can’t answer those questions. You’ll have to go to an adviser’, and the adviser will say to them, ‘Sorry, my books are full. I can’t help with you that information’,” Mr Jones said.

He explained that currently, the average super balance that Australians are retiring with is $200,000.

“Obviously, when you pick an average, there will be a lot of people with a lot of more and a lot of people with a lot less and we’re trying to get that number up so people can have dignified retirement. And 1 July, people’s superannuation clicked over to 11 per cent, so that’s good — sorry, 10.5 per cent. That’s a good thing. And it will move to 12 per cent between now and 2025. Every year, it will click up an extra half a per cent. Two-hundred thousand dollars is good but even $200,000, you’re going to have a retirement with a blended income of pension and private savings, so therein lies some complexity with the tax system as well, and what about if your partner is still working or if you’ve got a residual mortgage that you have got to pay off?

“So people need some basic info and advice. I’d rather they got it from someone who knew what they were talking about than going to TikTok or Instagram,” the minister said.

Mr Jones blamed “layer after layer” of “well-meaning regulation” for “protecting consumers from good advice”.

“There’s just not enough people and not enough avenues to get the advice, and that’s what my job is to fix,” he said.

Asked to elaborate on how he intends to “fix” these issues, Mr Jones shared his three-step plan.

“So, I’ve got three jobs of work going on at the moment. The first is about red tape reduction, removing all the obstacles that don’t provide any consumer protection but do make it harder for a licensed financial provider to provide information and advice to consumers. Hopefully, that will enable advisers to bring more customers in but also reduce the prices,” he said.

“A second job of work is looking at how can we safely provide an environment where superannuation funds can provide information to their members. They stopped doing it in large part because of the reforms put in place over the last decade. We do have to ensure that we’re managing for conflicts of interest. So, don’t want to see a situation where someone is getting a commission for providing advice to somebody to buy a product from a superannuation fund that they work for. So, we’ve got to work through all of those conflicts to ensure that information and advice are being given by a fund that’s absolutely in the interests of the person who’s receiving it. And that’s what I’m dealing with the profession and with superannuation funds and with regulators and consumer groups through at the moment,” Mr Jones added.

His objective is “ensuring that people can make good decisions because they have good information”.

Mr Jones also highlighted that he doesn’t want Australians turning to Instagram influencers who have “no license, have no knowledge, have no qualifications, and are providing broad and sometimes dangerous information to people”.

His view of influencers stands in contrast to what former financial services minister Jane Hume used to propagate. Namely, her view was that influencers are just the latest iteration in a long line of consumers sharing views about financial markets, not unlike “taxi drivers giving stock tips”.