Super reforms must prioritise better products, not just more advice
The Federal Government’s latest financial advice reforms fall short of delivering meaningful help for Australians planning for retirement, Super Consumers Australia has warned in a new submission.
Super Consumers supports greater clarity around the scope of advice super funds can offer, but only if it’s part of a broader package of reforms to improve product quality, transparency, and safety in retirement.
Xavier O’Halloran, Chief Executive Officer at Super Consumers Australia, said, “this reform allows super funds to give advice about retirement products. But when most funds only offer one product, that’s not advice – it’s a sales pitch.”
While the submission supports moves to simplify and clarify advice obligations for super funds and advisers, it flags key concerns about how the reforms will work in practice.
While targeted superannuation prompts (a form of behavioural nudge) might help some consumers engage with retirement planning, they must be safe and effective. “Prompting someone to take action only works if the system offers them safe, high-quality products to act on,” Mr. O’Halloran said.
The submission recommends robust safeguards, including consumer testing of prompts and tighter definitions around what constitutes a product ‘recommendation.’
“Client advice records are meant to help people understand their financial advice,” said Mr. O’Halloran. “But unless they’re in plain English, concise, and consumer-tested, they risk becoming just another compliance checkbox.”
Super Consumers is calling for the Australian Securities and Investments Commision (ASIC) to provide clear guidance to advisers about how to create good client advice records, including sample templates that are tested with consumers.
The submission outlines a comprehensive package of reforms needed to protect all Australians, especially those on low and middle incomes, including:
- Mandatory minimum standards for retirement products, just like MySuper
- Performance testing for account-based pensions
- A free, government-run product comparison tool hosted on ASIC’s Moneysmart
- A one-stop-shop information and guidance service, modelled on the UK’s Money and Pensions Service
“Australians deserve a system that delivers safe, high-quality retirement outcomes, not just advice that steers them into the only product a fund has to sell,” Mr. O’Halloran said.
“We’re calling on the Government to step up and make the retirement system safer by design, so that no one is left behind, whether or not they get financial advice.”
Read the full submission: Here