Government is looking beyond super to expand access to advice

In an exclusive interview with ifa, Financial Services Minister Stephen Jones spoke about stream three of the government’s Quality of Advice Review (QAR) response and while he expressed a lack of concern with the banks’ commercial interests, he stressed his ongoing efforts to expand access to financial advice, particularly for individuals in their mid-40s to late 50s.

“I’m here to work out what’s in the public interest and what’s in the interest of consumers. And in assessing that, I said, well, where are the burning decks? What really needs to be dealt with most urgently? I think retirement is one of them. It’s not obvious to me that the person who’s planning their retirement, and they look at their superannuation statement, says, ‘The first place I’m going to go to get some advice on what I do with my superannuation is my bank manager’. That’s not obvious to me,” the minister said.

“What is obvious to me is one of the first places that they’re going to go is the phone number on the bottom of their superannuation statement to ask some questions. And when they do that, at the moment, the person who picks up the phone says nine times out of 10, ‘I’m sorry, I can’t provide you that information’. So that’s the problem I want to fix,” he noted.

The QAR recommended that alongside superannuation funds, banks and insurers up their involvement in financial advice in order to plug the advice gap.

While advisers have been opposed to this idea, they have argued that Mr Jones’ exclusive focus on superannuation funds won’t solve the advice gap given Aussies’ advisory needs expand beyond super.

Touching on this on Monday, Mr Jones said that there’s nothing stopping Aussies under the age of 55 from seeking help from other professionals within financial services.

“There’s no shortage of mortgage brokers. People, when we’re talking about advice, seem to forget there is a group of credit advisers out there called mortgage brokers and there’s a lot of them and they’re competing with each other and the banks to provide a decent service to their customers. I think we got credit advice, at least in the mortgage space. I think we got that pretty much sorted there,” he said.

That said, however, the minister acknowledged that a gap does exist.

“I’ve challenged the banks and others to say, tell me what you want to do, because there’s probably some stuff that needs to be done there. Is it important? Yes. Is it the most urgent thing? No. Which is why I’m dealing with the urgent.

“But I do want to look at that because I think you’re right. I think there’s that generation between the age of 20 and 55. That’s a big group. I know.”

The minister also highlighted the presence of another group that “we haven’t quite nailed yet”, and that is Aussies in their mid-40’s and late 50’s that may have come into an inheritance or are just in need of financial advice.

“Or maybe they’ve got a capital gain somewhere and they got a lump of money and maybe they’ve not been that financially savvy themselves, or don’t have the time, or whatever it is, but they could really do with some advice. And if the place they’re going to at the moment is Instagram or TikTok or Google. That’s not a very safe place to go to get financial advice.

“I think we’ve got to do something with that group as well. And they probably only need once-off advice. They don’t need to be having an ongoing contract with a financial adviser. So, I’ve got to find a way of dealing with that issue as well”.

To watch our full interview with Minister Jones, click here.