The institute this week published the Help, Guidance and Advice (HGA) framework that says that, presently, legislation for financial advice and its associated regulatory provisions are “fairly blunt instruments” that don’t clearly discriminate between relatively simple forms of advice with low degrees of potential consumer harm and much more complex advice, with higher associated risks for consumers/members.
“In the short term could we introduce a tiered approach to advice with differing levels of complexity, and hence with a need for more robust regulatory ‘guardrails’ as complexity increases,” the report reads.
It suggests that appropriate tiers could be:
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Simple (low risk): This could include advice about the amount of life insurance needed, the treatment of contributions within a superannuation fund, budgeting and cash flow issues and saving through safe products such as bank term deposits.
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Normal (medium risk): Deciding on an investment strategy, moving onto an investment platform, converting superannuation accumulation balances to a post-retirement portfolio, generating an effective retirement income and setting up SMAs.
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Complex (high risk): Setting up an SMSF, geared investment (including property) and international investments.
The institute said the framework could greatly assist millions of Australians to access a broader range of support to improve their financial decision-making and wellbeing, and would provide a structure under which financial institutions could confidently deliver a wide spectrum of quality and affordable support to their customers.
Additionally, the report stated the framework may also assist in navigating the current challenging industry debate regarding the new class of adviser (NCA) and intra-fund advice.
For example, many issues addressed through “intra-fund” advice fall into the ‘simple’ category, for which collective pricing may be appropriate.
It continued that the tiering concept could then be extended to guidance, which needs greater legislative and regulatory recognition and should have a “light touch” and principles-based regulatory framework.
Andrew Gale, experienced non-executive director and chair of the HGA Working Group, said the proposed framework would ensure people have access to basic financial facts through to guidance and suggestions on retirement goals, as well as comprehensive personal advice on a range of financial issues.
“Middle Australia stands to benefit most because comprehensive personal advice is out of reach for many, but help, guidance and specific purpose simple advice at pivotal moments would significantly improve their financial wellbeing,” he said.
“Our framework provides the architecture that will enable millions of people of all ages to receive support in different levels of complexity and that fits their individual needs. We have a tsunami of retirees coming over the next decade, but many don’t want or need or cannot afford full, comprehensive financial advice.”
The framework was developed after extensive consultation with superannuation funds, consumer groups, industry and professional bodies.
Gale said if implemented, it would significantly expand the capacity of financial advisers, accountants, superannuation funds and digital tools to provide support, including to the estimated 710,000 Australians intending to retire in the next five years.
“The HGA framework is needed because existing regulations treat all financial advice as equally complex and fail to distinguish between what is simple guidance compared to comprehensive planning,” he said.
“Guidance currently operates in a regulatory grey area between help and advice. It provides an important bridge between providing someone with basic financial information and personalised advice. It is widely seen as a scalable and cost-effective mechanism for delivering meaningful support.”
Furthermore, the proposed expansion from an advice focus to an HGA focus would greatly expand the capacity and capability of financial advisers, superannuation funds and digital solutions to meet the needs of Australian consumers/superannuation fund members.
“By so doing, it would increase access to affordable HGA and improve the financial wellbeing of Australians,” the report reads.
“The demographic reality is undeniable: Australia’s retirement wave cannot be served by traditional advice models alone. The HGA framework provides the architecture for transformation, but implementation requires more than regulatory change — it demands industry commitment to innovation, consumer-first design and collaborative execution.”
The institute said this is not just an opportunity for incremental improvement but a necessity for national financial wellbeing.
“The next decade will determine whether Australia successfully navigates its demographic transition with enhanced financial outcomes for millions, or whether the advice gap becomes an advice chasm. The framework exists; the reforms are advancing; the imperative is clear. The time for action is now.”
