Expanding the definition of personal financial advice and allowing more individuals with lower qualifications to provide it could radically transform the delivery of advice.
This expansion should reduce the number of people who receive no advice at all just because their relatively simple needs can’t currently be met by their superannuation funds.
But the potential benefit to members of super funds – which are widely expected to be the main beneficiaries of these two key changes recommended by the Quality of Advice Review – is illustrated vividly in an analysis of member interactions produced by Link Advice’s retirement and superannuation solutions business, which wants to ensure more Australians have access to information, guidance and advice.
Every year contact centres operated by Link Advice receive more than 3.5 million telephone calls from super fund members, on behalf of Link Advice’s clients. A lot of those calls are straightforward – account balance enquiries and the like – but around one in seven, or about half a million calls a year, have an advice-related dimension to them.
That’s when things can start to get complicated. Depending on the nature of the advice issue, Link Group can provide general advice, personal advice under intra-fund advice rules, scaled advice, or a referral for comprehensive advice.
In 2022, Link Advice booked more than 20,000 advice appointments with fund members – an average of about 80 appointments every working day of the year. These meetings were mostly with members aged between 55 and 66; and most member account balances fell in the $200,000 to $1 million range.
About 70 per cent of the people who attended one of these meetings received an advice outcome of one sort or another. The 30 per cent who didn’t go on to get advice were either satisfied by a combination of simple general advice or education; no longer had an advice need after the call; or were satisfied by “myriad other outcomes”.
Link Advice CEO Duncan McPherson tells Professional Planner those advice outcomes ranged from structured general advice, “which is more strategy and concept-based, like retirement health checks and retirement options”, to personal financial advice – primarily intra-fund – to a referral for comprehensive advice.
McPherson says around 2000 members were referred to comprehensive advice “because we were unable to provide them advice under the current advice framework of the [superannuation] sector”, and that’s the point at which a significant number of people are lost to the advice system.
“Less than 7 per cent ended up with advice, as defined by an SOA [Statement of Advice],” McPherson says.