Financial Advice Reform and Help, Guidance and Advice
A Discussion Paper proposing a principles-based framework to make financial support more accessible for all Australians.
Millions of Australians need help with their finances but can't access or afford traditional financial advice. With increasing regulatory change and heightened consumer expectations, a new framework is needed – one that distinguishes between simple help, general guidance and comprehensive advice.
In Financial Advice Reform and Help, Guidance and Advice, the Actuaries Institute's HGA Working Group examines how a principles-based framework could improve financial wellbeing for Australians.
"Our framework provides the architecture that will enable millions of people of all ages to receive support in different levels of complexity and that fits their individual needs," says Andrew Gale, Chair of the HGA Working Group.
We have a tsunami of retirees coming over the next decade, but many don’t want or need or cannot afford full, comprehensive financial advice. Giving them help and guidance on common issues - such as Age Pension entitlements, and how to think about paying down debt and moving superannuation to a retirement phase account - would allow them to retire with greater confidence.
In brief:
- Closing the advice gap requires a more accessible, scalable and trustworthy framework. Current regulation fails to distinguish between simple guidance and comprehensive planning, leaving many Australians without the support they need.
- A principles-based Help, Guidance and Advice (HGA) framework would apply broadly to how financial institutions help consumers improve their financial wellbeing. Consumers require support ranging from help to guidance to different levels of advice complexity – each serves a distinctive purpose.
- The Government's Delivering Better Financial Outcomes (DBFO) reforms, due to enter Parliament soon, are expected to represent a positive step toward increasing access to affordable help, guidance and advice. Superannuation funds will play a pivotal role alongside financial advisers, other financial institutions and digital solutions. However, further regulatory reform will likely be needed post-DBFO, particularly around guidance. The proposals in this Paper could help refine these reforms to realise their full potential.
Discussion Papers are a series of papers written by actuaries and published by the Actuaries Institute which aim to stimulate discussion on important, emerging issues. Opinions expressed in this publication are the opinions of the Paper's authors and do not necessarily represent those of the Institute.
Be informed. Stay ahead. Subscribe.
Receive industry-leading perspectives, straight to your inbox.
