The government’s quick decision to allow people in financial distress due to the coronavirus to withdraw up to $20,000 from their superannuation will force advisers to make some tricky judgement calls in the coming months, according to WealthSpring Financial adviser Liz Hughes.
The emergency measure, announced by the Morrison government last week along with a host of other measures designed to mitigate the financial damage of the coronavirus, will ultimately become a question of balance, she believes
“How do we balance the needs of today with the needs of the future?” Hughes says.
Hughes will speak at the March 31 Digital Retirement Conference, presented by Professional Planner and Investment Magazine, alongside AMP managing director of superannuation, retirement and platforms, Lara Bourguignon and AustralianSuper senior product manager for retirement, Louise Aracas on how we can all work together to improve adequacy in retirement.
The government’s new allowance throws a spanner in the works; while the session was due to tackle a raft of issues including gender, employment and education imbalances in the superannuation system, dealing with the broader effects of the coronavirus as it pertains to retirement will likely take precedence.
For Hughes, that means re-addressing the question of balance between today and tomorrow.
“The members who need to access to their superannuation under the COVID-19 conditions would be also likely be the same members who may face financial insecurity in retirement,” she says. “And the younger the member, the more substantial the impact will be in the long term.”
The confluence of a pandemic and a heightened regulatory environment for advisers will inhibit industry’s ability to provide advice to the masses of people looking for help making these kinds of decisions, Hughes notes.
“We are now in a compliance environment where it’s not financially feasible for advisers to provide personalised advice on the potential impacts, so wider community education is needed,” she says.
To register for the Digital Retirement Conference, follow this link.
