The adoption of Quality of Advice Review (QAR) proposals to reshape the provision of financial advice would benefit a further two million retirees who would drawdown more than $20 billion by 2040, according to research released by the Financial Services Council (FSC).
The research, conducted by NMG Consulting, found that if the proposals were implemented, two million people who were new to advice would be able to receive it, increasing the number of retirees with access to advice to 6.7 million.
At the same time, a further $22.5 billion would be drawn down from superannuation each year, resulting in a reduction of assets being passed on at death of $6 billion by 2040 and by 2060 annual drawdowns would increase further to $42 billion and bequests would halve from their projected path of $53.7 billion to $26.8 billion.
In the research, NMG stated the QAR reforms would “increase the provision of information, products and advice that is fit for purpose to consumers, particularly those who are unable to afford comprehensive advice”.
The QAR proposals would also “shift the superannuation system’s focus towards making consumers more confident when drawing down their retirement savings, resulting in higher consumption throughout retirement, and enable increased retirement-specific advice and member engagement by enabling trustees to better guide and engage members through tools that are deterred by current regulation”.
FSC chief executive Blake Briggs said: “Despite the benefits of compulsory superannuation, if advice policy settings are left unchanged, only a third of retirees will get financial advice over the next decade.
“A generation of retiring Australians would benefit from high-quality and affordable financial advice that is fit for purpose, on the topics they want, when they want it.
“The review’s proposals would help millions of Australians put in place a plan to spend more of their superannuation with confidence and in a way that improves their financial well-being throughout their retirement.”
