During the SMSF Association National Conference last week, Michelle Levy, the lead of the Quality of Advice Review (QAR), argued that her final report does not recommend the creation of a two-tiered advice model of relevant and non-relevant providers.
“I don’t think it is two-tier. In the law, you need to draw some stark boundaries because otherwise, it doesn’t work, but I think advice is a continuum,” Ms Levy said.
“What I have said is that there is some advice that is reserved for professional advisers.”
Ms Levy also defended her recommendation that superannuation funds should be allowed to provide financial advice.
She dismissed the notion that her recommendation favoured the funds over advisers and consumers and labelled suggestions that a fund should not provide personal advice to its members as “nonsensical and stupid”.
“It wasn’t my purpose to help superannuation funds themselves or banks, it’s about their customers and their members,” she said.
Ms Levy emphasised that having recognised that the 16,000 or so advisers in the industry could not meet the increasing need for advice, she explored various options with a view to developing a new idea to solve the accessibility crisis.
During her considerations, Ms Levy also contemplated the idea of the government distributing advice, akin to the UK model where individuals over the age of 50 can access government-backed free guidance. She soon, however, learnt “it falls short of meeting people’s needs”.
“It doesn’t actually meet people’s needs. It assists. And I did say in my report that I think the government could be doing more … But it’s not going to resolve the issue,” Ms Levy said.
“If I had recommended that the government set up a free advice body, new department, well it would be less popular with the government than my recommendations are now, I suspect.”
Speaking particularly about superannuation funds, Ms Levy highlighted that the relationship with one’s superannuation fund could potentially be the longest-lasting relationship in an individual’s life, especially considering that if the fund meets their needs, they may remain with it from the age of 18 until they reach 100.
Ultimately, Ms Levy assessed that the QAR would not bring about significant change for advisers.
“It’s really about getting back to the core of your role,” she said.
How is it that a Superannuation fund can provide advice and meet people’s needs without having the prerequisite skillset? Advisers have been required to undertake significant uptick in learning and pass industry exams and have specialist accreditations to provide advice across all aspects of a clients situation. Yet Ms Levy says that Superannuation funds should be able to provide advice and if that doesn’t occur it is nonsensical and stupid? Why can a super fund provide advice that may impact other aspects of a clients situation without qualifications yet an adviser needs to take into account all aspects of a clients situation that advice may impact ie Superannuation with concessional contributions, holding insurance inside superannuation and the erosion of retirement benefits.
Her messaging is conflicting at best. Ms Levy’s last line about getting back to the core of your role sums it up. Superannuation funds are administrators of your benefit not advice providers. Simple I would have thought