Possibility to line up super and tips
There is an opportunity for alignment between pensions and financial advice, but not until the industry is truly independent, according to Pensions, Financial Services and Digital Economy Minister Jane Hume.
During Industry Super Australia’s “A Better Future for Members” webinar, Hume was asked if super funds can provide free financial advice to members through salaried employees.
Hume said the consulting sector has undergone significant reforms over the past decade and will continue to do so.
“It’s basically gone from a sales industry to a profession and it’s been a very uncomfortable journey for a lot of those in the industry, but it’s been important,” Hume said.
“I think there is now a great opportunity to see a much better alignment between pensions [and the advice sector], especially once we get to that phase of disaccumulation, but the consulting industry still has some way to go. “
Also responding to the question, Labor Deputy Treasurer Stephen Jones said he was “extremely uncomfortable” with the model suggested in framing the question.
“I’m not going to rule it out but I’m extremely uncomfortable with the model that was suggested [by the question]”Jones said.
“The Hayne Royal Commission showed all the conflicts that exist through integrated vertical organizations where the advisor is attached to the fund… therefore the momentum and incentive to capture value is immense.
“And I think it would be naïve to think that this is just a problem in the retail industry, and it wouldn’t be, if we extended this to the whole industry, a problem. in the industrial sector. “
Responding to Jones, Hume said she was well aligned with him on financial advice being a highly independent profession.
“It took a long time to get them here, let’s not waste it now,” Hume said.
Jones said getting the right piece of super-regulation advice was just as important as having the right to the retirement clause and the payout.
“The consulting industry is in turmoil, the old business model is crowded, the new business model has yet to be created,” he said.