Labor says Australians could save thousands of dollars when seeking guidance on their retirement, life insurance and superannuation as it promises to slash red tape and bring in a new class of financial advisers who will provide simpler advice.
Financial Services Minister Stephen Jones said recently that the proposed changes, set to be introduced to parliament next year, would combat a “supply crisis” among financial advisers and make advice more affordable for millions of Australians.
“[It] will be a hell of a lot less than the $6,000 you would currently pay for your initial consultation for a piece of comprehensive financial advice,” he said.
“It will save people thousands and thousands of dollars on the cost of the advice, and thousands and thousands of dollars because they’ve acted on that advice.”
Research shows four out of five Australians aged 45 to 54 need financial advice but cannot afford it, and nearly three-quarters of those aged 18 to 34 have unmet advice needs.
Figures from Adviser Ratings in July showed financial advice fees increased by about 7% over the previous year, with a median fee of $3,960 a year. Over five years, fees had risen by 58% amid a continuing shortage of suitably qualified financial planners.
The first tranche of the government’s legislation to reform financial advice, passed in July, included measures to cut red tape for planners and clarified that Australians could pay for advice on their superannuation using funds from their retirement savings.
The second tranche makes clear that Australians would not be able to use their super to get advice on other areas such as investing in cryptocurrency or the bond market, reported The Sydney Morning Herald.