In an APRA submission, the FAAA said it recognises the fundamental role of superannuation in the retirement income system and in supporting Australians during this important stage of life.
It continued that the collection and publication of clear and consistent data will assist consumers to make informed decisions when selecting a trustee to help them achieve their desired retirement outcomes.
However, it said there needs to be “transparency’ in regard to the proposed collection of data about financial advice, noting that financial advice provided in relation to superannuation can be personal or general financial advice, as defined in the Corporations Act.
“It is important to clarify the type of advice the reporting framework is measuring. We support the focus on measuring the provision of personal financial advice (excluding other forms of financial advice, such as general advice),” the submission said.
The FAAA said it supports the proposed approach in relation to the collection of data regarding fund member access to personal financial advice and the take up of personal financial advice by members 60 years and over.
It also supports the proposed publication of this data at the RSE licensee level for the personal financial advice indicators – 3, 3.1 and 3.2.
“Measuring trustee personal financial advice offerings will provide helpful insights into the assistance funds provide to members at this critical stage in their retirement journey,” the submission said.
Furthermore, the FAAA said it supports the proposed indicator of “Yes” or “No,” in conjunction with the clear reporting instructions for trustees to “report if members have access to personal advice via in-house advisers or through a referral arrangement to a third-party provider.”
In regard to member cohorts for personal financial advice indicators, the FAAA said it is important to differentiate between the provision of financial advice by the fund about the member’s interest in the fund, and the provision of financial advice from a financial adviser the member has selected.
“Differentiating these member cohorts based on the mechanisms used to pay for the advice provides a clear approach that can be applied consistently by industry to deliver comparable data. We suggest these cohorts are simple and consistently defined to provide useful data,” it said.
“Whether significant value would be obtained by segmenting indicator 3 further, such as by member cohort or attributes, we suggest that in relation to financial advice, this could include whether the member is still receiving employer contributions.
“Collecting data for this cohort may help to elicit more granular data and assist in identifying gaps in the availability and/or take up of personal advice at critical life stages, including those at retirement age who are continuing to work.”
