The Australian Securities and Investments Commission (ASIC) has moved to get Australians affordable financial advice as many families face some of the toughest decisions of their lives.
The government’s biggest worry is allowing Australians to access up to $20,000 of their hard-earned superannuation savings.
Under the special measures, if you have been financially affected by COVID-19 you can access up to $10,000 of your superannuation in 2019–20 and a further $10,000 in 2020–21.
Over 800,000 Australians have already signed up to take out a slice of their super savings. The government needs to be sure they will use it wisely.
Under new regulations announced by ASIC, rules that forced those seeking advice to fill out a plethora of forms before they could receive any help have been relaxed.
The government regulator has also allowed more professionals to give advice, including registered tax agents.
Importantly, the government has capped fees at $300, stated there must be a return on that investment, and said the “advice provider must establish that the client is entitled to the early release of their superannuation.”
Normally, advice – which is governed by a whole raft of legislative requirements and imposes enormous work on advisers – would cost four figures, with adviser groups maintaining the administration itself would cost more than $300.
So where to find an adviser willing to give advice at that price may be an issue.
A snap poll conducted by one financial adviser site with 23,000 members found 65 per cent of members would not be offering the service as the amount was insufficient, and only 25 per cent approved of the scheme.
Thankfully, large organisations like AMP can see the long term value of helping Australians at this important time of need.
“AMP welcomes the decision by ASIC to give the advice industry a degree of regulatory relief to assist advisers in providing timely advice during the COVID-19 pandemic.
“We’re pleased the regulator is taking practical steps to support Australians in their time of need. Advice will be critical for many as they weigh up really important financial decisions.
“One of the main areas our clients are looking for information on is early release of super. We see our role as helping clients make the best decision for them.
“We unequivocally support the government’s measures to help those in hardship, however accessing super early will have an impact on retirement, so it’s important everyone carefully considers all options before making the decision.
“As we emerge from COVID-19, industry, government and regulators should come together to design an advice model for the future, which ensures affordable and accessible advice for all Australians. ”
Five major Australian professional bodies have joined forces to ensure Australians get the advice they need to understand the Federal Government’s COVID-19 economic packages.
“There has been an increasing demand for advice around early access to super since the Government announced Australians could access up to two parcels of $10,000 in superannuation tax-free as part of their second stimulus package,” said the joint bodies.
“We have come together and collectively worked with ASIC to help the Australian community and to ensure there are more skilled advisers in the marketplace to address this demand.
“This move has removed significant red tape and ensured a simple, streamlined process is in place so those facing financial hardship during this time get the right advice.”
The bodies are: The Financial Planners Association, the Institute of Public Accountants, Chartered Accountants Australia, the SMSF Association and CPA Australia.
The move means more Australians will be able to access good financial advice at an affordable price, and be exposed to the value a financial adviser can bring to their lives.
It is considered a game changer by the industry, which has languished since Government inquiries into the finance industries have destroyed trust and caused many to question the independence of financial advisers.
Meanwhile the Government is warning scammers are calling people up and asking for their super details, saying they can arrange the withdrawal.
Their advice: never give your Super details to a stranger and certainly not over the phone.