On this page
- A matter of trust
- Advice from your super fund
- The Financial Information Service
- ASIC Moneysmart
- Financial counselling services
- The bottom line
- Join SuperGuide and supercharge your retirement
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Australians are reluctant to seek professional advice, even when they acknowledge they need it. According to the Investment Trends 2022Financial Advice Report,over 12.4 million Australians have unmet advice needs.
For past generations, financial advice was not such an issue. The average Australian worked, bought a house, raised a familyand retired on the Age Pension. But the introduction of compulsory super changed all that.
Now every Australian with a super account is exposed to capital markets and the impact of market twists and turns on their account balance. Weare also encouraged to fund ourown retirement, so the performance of oursuper, how it intersects with the Age Pension, other investments and constantly shifting super rules really matters.
The growing complexity of our retirement system means most people will need advice to get the most out of their super and plan for retirement.
A matter of trust
The main reason people give fornot seeking financial advice is cost, as rising fees and falling adviser numbers put advice outreach formany Australians.But trust is also an issue.
The Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industryseriously dented the reputation of the advice industry. The commission unearthed conflicts of interest where advisers wererewarded for selling certain products whether they werein the client’s best interests or not, as well as systematic overcharging, hidden fees,and fees for no service.
Despite recent reforms, the industry has a way to go to regain the community’strust.
The good news is that there is excellent, free advice available from government and community organisations, and your super fund may alsobe able tooffer you advice without an additional cost.
In this article, we coverthe advice that may be available from your super fund,the government’s free Financial Information Service, tools available from the Australian Securities andInvestments Commission (ASIC)via the Moneysmart websiteandfinancial counselling services for those in financial difficulty.
Read more about financial advice through super.
Advice from your super fund
Many super fundsoffer their members simple advice at no additional costby charging all members collectively for the advice service via administration fees. This service is known as intra-fund advice.
Intra-fund advice canonly be about your super in thatfund. It can’t be about comparing funds and consolidating your super, or about other products.
Commontopics covered by intra-fund advice services are:
- How much insurance cover you need in the fund
- Which of the fund’s investment options would be most suitable for you
- The most effective way for you to make super contributions.
These services may be provided over the phone, via a websitecalculator, or both. A Statement of Advice (SOA) will be generated that explains the advice you have been given.
It is important to know that these services are designed only to give simple advice. For example, when giving contributions advice through this service your fund will ask how much youcan afford from your take home pay to contribute to super. The adviser can then calculatewhether you should make those contributions by salary sacrifice,after taxor a combination of bothto makethe most of tax savings and any government co-contribution you are eligible for.
The adviser can’t generally suggest an amount for you to contribute based on your income and expenses or advise on whether you should prioritise other aspects of your finances like debt repayment before considering super contributions.The advice is given on the basis that you have already decided to contributeand know what you can afford.
The Financial Information Service
The federal government’sFinancial Information Serviceprovides free information and education on a range of financial issues, from investing to superannuation, retirement planning, the Age Pension and aged care. The operative word here is ‘information’.
The service can’t offer personal financial advice, free or paid, because it isn’t licensed to do so. That means it can’t sell or give advice, prepare a financial plan, recommend investments, tell you how to invest your money or recommend a financial adviser.
But sometimes, information is all you need to make your next financial move or lifestyle choices.
Note: A financial planner or adviser (the terms are used interchangeably) is a person or authorised representative of an organisation licensed by the Australian Securities and Investments Commission (ASIC) to provide advice on some, or all, of the following: investing, super, retirement planning, estate planning, risk management, insurance and taxation.
What FIScando is explain:
- How to make informed decisions about your finances
- The risks of certain financial products
- How you can increase your overall retirement income
- The roles of financial professionals
- How to choose a financial adviser.
FIS is operated by Services Australia. It is open to anyone of any age – you don’t need to be a retiree or on Centrelink benefits.
You can phone and speak to a FIS Officer (FISO) or make an appointment for a free face-to-face consultation at your local Services Australia service centre. You can take someone along with you, allow someone to speak on your behalf (subject to signing an authority naming them as your representative) or request an interpreter.
FIS also holds regular webinars you can attend live or watch later via a recording. Topics include planning for retirement, understanding superannuation, the Age Pension, retirement accommodation options and aged care fees and charges.
I attended one of these sessionson the Age Pension to see first-hand how useful they were. At the very least, it provided an opportunity for the people who attended to start their information gathering, ask questions and identify issues to follow up, perhaps with a face-to-face interview with a FIS officer or their financial adviser.
Contact details
- Call132 300and say “Financial Information Service” to arrange to speak with a FIS officer over the phone, by video chat, or in person
- Visit the Services Australia websiteto book a free live webinar or watch a pre-recorded session
For more information on the service, as well as online financial tools and guides, check theServices Australia website.
ASIC Moneysmart
The Australian Securities and Investments Commission (ASIC) maintains a consumer websiteatmoneysmart.gov.au. While the site can’t provide advice in the form of recommendations, it does offer a range of calculators and tools that can help you to make your own decisions.
The benefit of this service is that it is independent of any product providers and is designed only with your interests in mind.
Available calculators include:
- A budget planner
- A super calculatorthat estimates your final super balance and shows the effect of fees
- A super contributions optimiser that calculates the type of super contribution that will give your super the biggest boost
- Aretirement plannerthat estimates your retirement income basedon your contribution level
- An account-based pension calculator for people close to retirement to estimate how long an account-based pension would last, based on your chosen annual withdrawal and product fees
- Areverse mortgagecalculator
- A managed funds fee calculator
Financial counselling services
If you have lost your job, have reduced working hours, or are struggling to pay household bills for whatever reason, help is at hand.
Financial counselling services offer free, independentand confidential information, supportand advocacy to people who are currently facing financial difficulty. They also provide support for people suffering more complex issues such as domestic violence, elder abuseor problem gambling.
These services are provided through a network of local community organisations, legal centresand government agencies.
If you have difficulty meeting repayments, can’t pay a billor need assistance developing a budget to repair your finances, you can access services over the phone, online or in person.
To access free information over the phone, or to get a referral to a provider of free face-to-face services in your area, contact the Financial Counselling Australia National Debt Helpline.
The service also offers a range of user-friendly, step-by-step online guides.
Contact details
- Call the Financial Counselling Australia National Debt Helpline on 1800 007 007.
- Go online towww.ndh.org.au.
- Visit the Moneysmart websiteto find a financial counselling service near you.
The bottom line
Free advice is hard to come by, but your super fund is a good place to start. If intra-fund advice is offered, you can access it at no additional cost.
ASIC’s moneysmart website is full of useful guidance and self-help calculators.
If you feel you need financial information or counselling, free services are available from the government’s Financial Information Service or the Financial Counselling Australia National Debt Helpline.
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