While a two-tiered advice model proposed from the Quality of Advice Review has won over support from super fund providers, there remains trepidation towards the re-emergence of vertically-integrated advice models. 

The government released review lead Michelle Levy’s recommendations earlier this month which is now under consultation. Financial services minister Stephen Jones will embark on a three-city roadshow in March to Sydney, Brisbane and Melbourne to engage with industry.   

The suite of proposals includes the introduction of a two-tiered model of financial advice – expensive professional advice from accredited financial advisers and less costly advice from financial services providers including banks, super funds and digital firms, provided the client is not paying for the advice. 

The two-tiered model proposed was supported by UniSuper chief executive Peter Chun when he spoke at last week’s 2023 ASFA Conference in Melbourne 

“Now is the time to really tackle broadening out advice, we are believers in this two-tier model. We should be focusing on the content of the advice and not the process… and the onus is on the institution to give good quality advice,” he said.   


The proposal has raised concerns around the re-emergence of vertically-integrated models, something the minister had previously warned against. 

“One of the key concerns for us is the recommendation that non-relevant providers will be able to give personal financial advice where the client is not paying for it,” Industry Funds Services (IFS) chief executive Csaba Baranyai tells Investment Magazine. The firm is a licensee with around 120 financial advisers that provides advice to members of more than 16 super funds.   

“If that does end up becoming legislated, the changes have the potential to herald the re-entry of banks and large product manufacturers back into the advice space. We feel this will undermine the attempts to professionalise the advice industry and pare back consumer protections,” he says.  

At a panel discussion at last week’s ASFA conference, Levy explained vertical integration already exists within the industry through the way financial institutions give advice about the products they market with the intention to encourage a client to buy their products. “That is vertical integration.” 

“Vertical integration isn’t an option in financial services. It is not feasible or desirable to separate the sale of a financial product from the issue of the financial product,” she said. 

“A financial product doesn’t sit on the shelf waiting to be acquired, it is created by the legal relationship between the customer and financial institution, the member and super fund.”  

Pivotal time 

The proposal to expand the services super funds currently provide to members comes at a pivotal time when 3.6 million Australians are expected to retire in the next decade.