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By the Editor in Chief

When the prestigious Australian Financial Review runs a conference, the biggest names turn out.  And so it was that the Super and Wealth Summit in Sydney saw the good and the great from the advice industry explaining why…well…they can’t give you advice.

It was tear-jerking stuff.

Alexis George of AMP said she realised how big the gap was when she visited New Zealand.

So the story goes Ms George was in the call centre of AMP’s Kiwi subsidiary when she listened in on a chat with a 19-year-old who wanted to ask whether it was a good idea to have all of his retirement savings in cash.

The Fin Review reported Ms George listened as her staff provided what she calls “little ‘a’ advice”, telling the young man the obvious: given his age and distance from retirement, he should probably consider a different asset allocation.

According to Ms George, in Australia: Right now, we wouldn’t be able to offer advice without a full financial plan costing the young bloke $5000 – or most of his super balance.

Australia, according to Ms George,  is one of the wealthiest countries in the world – but financial literacy is generally poor.

Gee it made me sad.

Except, of course, as one of our largest institutions, AMP could do a lot to change things.

It claims the law doesn’t allow it to give too much away without a highly expensive $5,000 money check.  But the boss of ASIC, Joseph Longo, claims that just isn’t so.

Renato Mota, boss of the biggest advice company Insignia, said it was a “walled garden”, where consumers either pay a lot to get full-service advice, or they get nothing.

Renato runs the biggest adviser group in the country at Insignia. He could change things too. He just doesn’t.  He too claims he can’t because of the law.

Daniel Shrimski is the boss of Vanguard, the second largest money management company in the world. He says the fact that just 10 per cent of Australians receive some sort of advice is not good enough.

Well, he should know. He’s about to tell us his company has a better super offering than, well, Australian Super.

All of this, we are told, is about to change.

Michelle’s Levy is an Allen’s Lawyer and next month she will tell us that we need simplify things. A new obligation to “give good advice” that is “reasonably likely to benefit the client” is the way to go.

We hope so.  But we’ve been here before.
So what really needs to happen?
Really Simple Money has been campaigning on this issue for five years. Our Together Australia campaign saw over one million Australians agree that we need to make real change.
We were amazed how many in politics, the finance industry, banking and business knew millions of Australians were blighted by a lack of financial literacy – but do nothing about it.
The government’s Financial Literacy Committee is a joke. Their literacy month comes and goes year after year and does nothing.  There is hardly one single paragraph reporting it. Whatever it costs, it should be shut down and the money diverted to organisations like ours that send out newsletters helping families week in week out.
We have a new government.  Let’s hope Anthony Albanese can make this huge leap on behalf of working Australian families and follow systems in Europe where advice at important life stages are subsidised.

We need to accept that money advice is as essential as health care and education. It will save billions in government social security if we were better money mangers.  And that will only happen with funded education and frequent campaigns.

 

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