ART pushes the importance of an ‘advice-led’ retirement

At its financial adviser roadshow in Sydney last week, Australian Retirement Trust’s executive general manager of advice, guidance and education, Anne Fuchs, said that the fund is focused on supporting retirees receiving advice.

“We believe at the Australian Retirement Trust in an advice-led retirement, not a product-led retirement, not a service-led retirement,” Fuchs said.

“An advice-led retirement isn’t just human-to-human advice in a personal context. Advice can also be general advice from one to many through an education service, but people have enough information to do it on their own.

“Digital has a massive role to play, and we are in the process of implementing. We’re well and truly through the first phase of implementing midwinter, which is the end-to-end engine for our calculators, the DIY, and then human-led simple advice.”

The timeline for midwinter will be to implement the “human” phase one by September this year, followed by the digital phase two, encompassing the calculators and implementing contributions, insurance, and other adviser tools, to be launched in the next financial year around March 2025.

The final hybrid phase combining both, allowing members to utilise the digital tools, is eyeing a 2026 release.

ART told ifa that in order to scale up advice for 2.3 million Australians, its adviser partners remain crucial as it will never provide comprehensive advice services to its members.

“If we can help more Australians with their really simple needs, what we actually hope is that off the back of what they learn from us, it actually builds awareness of the value of advice, and we can help obviously then grow so that more Australians are getting financial advice,” Fuchs said.

“I want to say also that we have deliberately leaned in on the Quality of Advice Review on your behalf. You may not know that and dare I say you may not care too much about it, but I want to tell you our perspective on this one.

“The Quality of Advice Review has the opportunity to change and transform advice and retirement outcomes for the better. And part of that is removing the red tape that you have to deal as professional practitioners that has added no value whatsoever to your client interactions.”

She added that when speaking with the government, ART has advocated on behalf of advisers.

“We do believe that [advisers] have a critical role to play. Yes, super does have a big role to play. But we believe that if you’re able to charge for your professional services out of super and it’s much more simplified, only good will come from that in terms of retirement outcomes,” Fuchs said.

The $260 billion fund is also looking to be an “incubator” for future professional advisers, Fuchs said, with the new class of advisers being implemented as part of the QAR reforms taking a large role in this goal.

“Another big part of this, which is very exciting for the next generation of practitioners, is this new class of financial planner,” she said.

“We hope that as a super fund, potentially, we can be the incubator for the next generation of professional practitioners.

“We already have a small PY program working, where we’re getting them out of the likes of Griffith University; they come in, they can work in the contact centre and in the context of where QAR is going, they can do that professional year, be supervised, provide very constrained advice with that digital advice safe framework, and then become a professional adviser in the confines of intrafund.”

The role of advice in the retirement income covenant

Comprehensive advice, Fuchs explained, is a “massive part” of the retirement income covenant, noting that because decumulation is an individual experience, ART “cannot scale up comprehensive advice”.

“Because we feel so strongly about the retirement income covenant, because we feel so strong strongly that retirement should be advice-led for an individual, that’s why we have leaned in really hard around Quality of Advice Review. Very, very hard,” she said.

“It has consumed us and we’re really proud with where we’ve got to with the government and Treasury.”

According to Fuchs, the complexity that has been added to the provision of advice has negatively impacted access but is hopeful that this could change.

“We believe, actually, that there’s an opportunity for advisers to maybe come back to help the mass affluent and ordinary Australians again,” she said.

“It’s become very expensive to provide advice. We recognise that over the last 10–15 years. But we believe that if we are able to remove a lot of the red tape that [advisers] have a role to play, because most Australians are pretty simple in their needs.

“They might only have their account, their house, maybe a rental property, maybe their spouses’ income, we can’t help them with that.”

ART, she added, views the reforms as an “opportunity to reset”.

“I think if we can work together on simplicity, that trust will go up enormously in the advice community and the profession overall. Then more people will be willing and seeking out that advice, whether it’s a point in time or an ongoing relationship,” Fuchs said.

“What we’re saying is that we’re about simplicity. We’re about trust. We’re about advice. But ultimately, we are an investment house that we need you to have confidence in.”