The Actuaries Institute has urged the government to get on with the job of finishing its Delivering Better Financial Outcomes reforms and move on to medium- and long-term issues, including the introduction of “guidance” as a bridge for super funds to use between fact- or information-based help and full-blown financial advice.
Andrew Gale, chair of the institute’s help, guidance and advice (HGA) working group, tells Professional Planner DBFO “is not a perfect solution… [but] would be a good first step in equipping trustees to providing advice and super in some defined areas”.
He says that once the current tranche of reforms is complete, the government should move on to “guidance, member data, those sorts of issues,” and eventually to a broader reform of the regulatory framework governing how funds support members to make good decisions as they approach retirement.
The aim of the institute’s paper, Financial Advice Reform and Help, Guidance and Advice, is “helping [the minister] map out a road map of what regulatory reform could look like over the next two to three years, in addition to the next two to three months”, Gale says.
The paper recommends revisiting recommendations of the Australian Law Reform Commission to restructure and streamline existing laws to make them simpler to navigate and less prone to contradictory definitions or interpretations.
Gale says Australians clearly need greater access to help, guidance and advice, particularly as they approach and enter retirement, but “there’s a real capacity issue” that funds – and others – are struggling to address.
Only around 15 per cent of people currently receive full financial advice, he says, while more than 60 per cent cannot afford it.
“So the big challenge for all of us is how we make more guidance and advice available to more Australians, especially middle Australia, so it’s accessible, meets their needs and it’s affordable,” he says.
“The regulatory reforms have got a valuable role to play, [and] we think a lot of the reforms are heading the right direction. There is still some tweaking to be done, and we think there’s a really big role in due course for what we describe as ‘guidance’ in the paper, which, as a concept, doesn’t really exist in Australia.”
Gale says the concept of “guidance” lies in a grey area, but has “potentially got a really valuable role to play”, adding that the work done by the UK’s Financial Conduct Authority on defining the boundaries between guidance and advice could serve as a useful reference point for local policymakers.
Stephen Huppert, a member of the institute’s working group, says many super funds are already trying to provide something like guidance but are still unsure about what they can and cannot do.
“There’s tension between the risk and compliance people and the member-led people,” he says.
“So one of the things we’re really calling out is that there is guidance of some sort happening, let’s clarify what it is. Let’s give some certainty to what it is, and that certainty would not just help providers, but should help consumers as well.”
When a member calls a fund with a question or a problem to solve, they do not naturally think in terms of ‘help’, ‘guidance’ or ‘advice’. They just want an answer or a solution. But “the super fund has to be very cagey about what they can say and what they can’t say, and it doesn’t really help with member engagement”, Huppert says.
The Actuaries’ paper includes a framework that distinguishes between three tiers of support: help, guidance and advice.
“Help is ‘how do I do something’; guidance is ‘what should I consider’; and advice is ‘what should I do’,” Huppert says. And if that structure is clarified, “it becomes a lot clearer for both the provider and the consumer” and presents to the member seamlessly.
The HGA framework
Source: “Financial Advice Reform and Help, Guidance and Advice”, Actuaries Institute, October 2025 |
“There’s a natural progression. Each is appropriately regulated according to the risks, and that’s a key principle that we looked at,” he says.
“We believe that the framework draws some clear lanes to help with that risk conversation.”
The paper proposes a triage process to determine what kind of support a member needs.
“The super fund decides, OK, this member needs some support, and there’s a fairly simple way to triage that. We see the triage process as a really important part of it,” he says.
Members might begin with simple help, move to guidance as their needs become more complex, and ultimately receive personal advice. Huppert says this clarity would “make it easier to have the conversation with the member to explain the three categories, what they fit into, and why they can do this or not do that, or they might have to refer on”.
Three phases of reform
Gale says that from a policy perspective the Institute sees reform in three phases and that “the last thing we want to do is to deflect attention from completing the Delivering Better Financial Outcome reforms”, he says.
“It’s been on the go now for a prolonged period of time, so we think the burning imperative at the moment is for that to see the light of day,” he says.
But once the first phase is complete – legislation including reforms dealing with advice in super, and targeted prompts – “ there’s a bunch of issues which do need to be addressed”.
In the medium term they include formally recognising guidance, giving funds regulatory certainty, providing trustees with clearer rules around collecting member data, and resolving what Gale calls “the trustee dilemma.”
In the longer term, Gale says the government should revisit recommendations made by the ALRC to simplify the financial services regulatory framework.
“The whole financial services regulatory framework and the Corps Act, et cetera, is extraordinarily difficult to navigate,” he says.
“That makes it difficult for providers, whether that’s financial advisers or super funds or others, and if that could be made much more readily navigable… that would really reduce the cost to serve and to deliver to members, and that would be equally in the consumers’ and the members’ interests.”
Huppert says the ALRC’s review of the Corporations Act, published in January 2024, is “really important work” which runs the risk of being forgotten while attention is focused so sharply on the DBFO reforms. But it could be integral to fixing the advice supply problem Australia faces and is highlighted in the institute’s paper as being instrumental in making it easier for trustees to fulfil their obligations and for members to receive the help, guidance and advice they need.
Gale says trustees have a desire – and an obligation under the RIC – to help members, but at the moment “they worry about tripping over into advice and all the regulatory obligations which flow from that”.
This caution is constraining the services they could be delivering to members, he says, and the DBFO reforms will help by clarifying what topics can be addressed and by introducing targeted prompts, which the Institute regards as “a form of guidance, even though it’s going to be under the label of general advice”.
However, he cautions that some of the prompts, as currently defined, risk crossing into advice territory.
“Guidance should be what are the issues to consider, what options should I be looking at… but stop short of hard recommendations,” he says.
Operational challenges
Huppert says clearer definitions would also support better operational processes.
“The clearer rules mean the funds can actually build some scalable systems that help do that triage and incorporate digital tools,” he says.
“At the help stage, there’s a lot more scope for the digital tools; with the guidance phase, it’s very much a hybrid approach; and once we get into the advice phase… there’ll always be the human need there.”
Huppert says the trustee dilemma “comes down a lot to how they interpret things, their risk appetite, the nature of the risk and compliance function”.
Some funds are more comfortable forging ahead under the existing rules, while others are more conservative, but “it’s very hard to point the finger at the trustees”.
“There is a genuine challenge that the trustees face,” Huppert says.
“So again, if we can help clarify some of that, then we’d like to think that it will be easier for the trustees to do more. But there is that tension within funds, where there will be parts of the business that want to do certain things. I’ve had conversation with heads of retirement that say, you know, here’s what we’d like to be able to do, but we’re still working through the risk and compliance aspects, and it’s taking a long time.”
Huppert says the paper does not aim tell funds what they should or shouldn’t be doing but instead offers “a framework and the pathway”.
“We’ll leave it up to the regulators to tell the funds what they should and shouldn’t be doing, and what we’re saying is this framework can actually support what the regulator thinks they should and shouldn’t be doing.”
Gale says the Institute hopes the paper “influences public policy makers and Treasury and the minister and relevant players to embrace some of these things,” adding that
policymakers should recognise that trustees are “dealing with uncertain issues and risk appetite issues”.
“If we had a clearly articulated framework for guidance with regulatory recognition, that could lead to much richer, much more useful discussions for supervised trustees to be having with their members and guide them on a path to good outcomes,” he says.
Huppert says the Institute’s motivation in publishing the paper is consistent with its long-standing position as an impartial, issues-focused body.
“Some people might say, well, what is the Institute doing talking about this?
A lot of the [institute’s] members are working in these fields, whether it’s superannuation, retirement products, life insurance, member growth, that sort of area.” Gale says the positioning of the institute is that “we always aim to be issues-focused, non-partisan folk, and just focus on getting those good outcomes without the commercial interests”.
