The Financial Advice Association of Australia (FAAA) has outlined how the concept of simple advice pertaining to the Quality of Advice Review and qualified advisers could work with regard to superannuation members.
“In the context of superannuation and what simple [advice] might look like, we might say that if a client or member who will qualify for the full age pension, then their situation is more simple,” FAAA chief executive Sarah Abood told a Pritchitt Bland Communications industry function held in Sydney last night.
“[In comparison, the advice needs of] someone who will qualify for a part pension, or won’t qualify [for the age pension] at all, might be more complex and might require professional financial advice.
“Demarcations [like this] would be simple and clear and we would know where we can give advice with a QA (qualified adviser) and where we need a [professional] financial planner.”
In a more general context, Abood said the concept of simple advice could be applied in a similar fashion to how medicines and drugs are currently dispensed.
“Let’s say the financial equivalent of buying paracetamol off the shelf at a supermarket might be [the equivalent of] giving advice to an existing [superannuation] fund member on the government co-contribution … we’ll call that simple and that’s fine,” she noted.
“[On the other hand] a schedule 8 drug that might require a prescription from a GP, perhaps that’s [the equivalent of] looking at strategies like transition to retirement, downsizer contributions, strategies that are more complex where if you get them wrong, the consequences are [serious]. You might say that’s not simple and you need to go to a professional financial planner to get advice in that area.”
She took the opportunity to suggest what simple advice might mean when a financial product is involved.
“Perhaps qualified advisers could advise on an existing financial product already held by a client, but not on establishing a new one,” she said.
