RISK ADVISERS CAN’T AVOID SUPER

/in , /by

Here’s why:

(a) It’s part of your ethical obligations

In December 2021, ASIC released an Information Sheet INFO267, titled Tips for giving limited advice.  Although ASIC uses the term ‘limited advice’, it is referring to ‘limited personal advice’ (i.e. scaled advice).  In the section, sub-titled, “Revising the subject matter of advice”, the following example appears:

“When providing advice about personal insurances, you should inquire about and consider the client’s existing superannuation and insurance policies. Where advice is provided to hold insurance(s) through superannuation, you may need to consider whether to also provide superannuation advice. (see Standard 6 of the Code of Ethics.)”

AND

(b) It’s a great opportunity good for business

  • Most people who have worked or are currently working have superannuation and to most, it remains a mystery
  • Competition is relatively low as many advisers continue to be intimidated by superannuation and its inherent investment component
  • 70% of employees passively accept their employer’s MySuper default fund because they don’t know what else to do
  • For many Australians, compulsory super is the only savings they have and together with their home, these are their two major assets
  • Superannuation is the #1 tax-advantaged investment in Australia
  • Most people don’t need to leave their current super fund to be put into a better position
  • Demonstrating high level expert super & investment knowledge to clients quickly engenders trust
  • For all of its tax advantages, super is preserved; therefore it represents only one aspect of a client’s financial life (i.e. retirement). Most clients need advice about more immediate aspects of their family budget – i.e. debt reduction, accessible savings and wealth building

WARNING: The above article is for financial advisers only.  It should not be mistaken by other readers for any form of personal or general product advice.  If you are reading this article and you are not a financial adviser, please seek advice from an authorised adviser to suit your particular situation and needs.