Personal financial advice communicated beyond retirement should be the scope of professional financial planners, according to Australian Bankers’ Association (ABA).
In its latest submission to the review of Cooper’s retirement, the ABA has expressed concern that changes in government regulations, through the Australian Securities and Investments with respect to intra-fund advice was “created for the application of divergent standards of financial advice in and out of retirement.”
The filing said that while the ABA supported the provision of accessible and affordable counseling, individuals may hold assets in and out of retirement, and an approach that applies only to retirement and other investment products was not problematic and that can have unintended consequences for members and consumers and the financial services industry.
“Advice on retirement will not always be simple, since it normally can be an integral part of establishing an individual’s wealth and protection requirements and features as part of a more comprehensive financial plan,” he said.
The presentation, said the ABA believes that it was valuable financial advice should consider the needs and circumstances of an individual beyond retirement – “I mean, advice should include strategies to maximize retirement contributions, private savings and the accumulation of wealth and to protect and maintain the capacity to save.
“Financial advice and estate planning should implement strategies for the management of an individual (and family) financial affair before and after retirement (and after his death) in a way that allows them to control your finances their needs and circumstances change,” he said.
The filing said that, in practice, advice on many aspects of retirement (i.e., contribution levels, investment rates, benefit payments, etc.) requires an adviser to have a thorough knowledge of the needs of an individual and the circumstances, not just their retirement savings.
“Therefore, the ABA supports the provision of general advice to members is provided via the affiliated pension funds. However, personal financial advice should only be provided to members by professional financial advisers – that is, qualified, the advisers of the license. The [cost and payment] for personal financial advice must be agreed by the member, “the submission said.
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