The role of banks and super funds in protecting Aussies from scams

Research released by the Association of Superannuation Funds of Australia (ASFA) in July revealed that 18 to 34-year-olds are significantly more likely to seek financial advice via social media than any other age group and are more likely to fall victim to online scams.

Appearing on Ausbiz, DASH chief executive Andrew Whelan explained that because young Australians are largely unable to afford to access a professional financial adviser, they are left seeking help “from areas that are accessible rather than areas that are trusted”.

Whelan said Australia needs banks and super funds to start offering simple advice to help bridge the advice gap because until financial advice is more affordable, people will continue to seek the help they can despite the potential risks.

“So what we are seeing across the board is, particularly with industry funds and banks, they’re going to come back into wealth, even though the ink is not yet dry on [legislation]. Certainly with banks selling out of wealth, we are seeing them coming back, and they need to,” he said.

“Banks need to come back and industry funds need to take a role with providing technologically driven advice from trusted sources, because people will get what they want, but … we can’t guarantee whether or not it’s worthwhile listening to.”

He said that while the amount people are willing to pay for advice has “doubled in the last five years”, the average Australian still only wants to spend just under $1,000, highlighting an increase in the perceived value of advice while also falling woefully short of the reality of advice fees.

When speaking on the government’s role in fixing the issue, Whelan said that “for the first time in a long time, the government is actually doing as much as it can”.

“I think, certainly, the Labor government has been accused over a long period of time of buddying up too closely to industry funds, but over recent times with QAR and the retirement income covenant, they’re bashing them over the head, saying, you need to do more, particularly for people who are entering into retirement, which is a really complex, multifaceted problem,” he said.

“The government, for the first time in a really long time, is actually doing the right thing in terms of focusing on the advice problem in terms of accessibility. The industry needs to respond and respond quickly now. So, I think it sits with us.”

Whelan explained that the next 12 months will likely see super funds rejoin the advice space to provide basic digital advice to millions of Australians in need of help who would otherwise be unable to afford it.

“Over the next 12 months, what we will see is a wide variety of industry funds coming out with follow the bouncing ball, self-help, advice journeys. So you can choose, ‘Am I in the right fund?’ ‘Do I have enough for retirement?’ ‘Do I need insurance?’ That is, it will be available for free to millions of Australians,” he said.

“I think give it 12 to 24 months, I think the industry will have pivoted to be able to offer this across the board.”