Charging fees for superannuation advice would provide better outcomes for consumers, according to UniSuper, by making them more likely to implement the advice.
In its submission to the Quality of Advice Review regarding super funds being able to give advice, the fund said it already opted to charge its members for any intra-fund advice they received.
This was because it felt charging a fee helped to put a value on the service and make the advice more likely to be implemented.
Going forward following the Review, UniSuper said low fees for advice could led to a service being overused by a small cohort of members whereas charging fees would ensure people were likely to act on it.
“It is unfortunate, therefore, that the proposed regulatory relaxation around the best interests duty would be conditional upon not charging for the advice. While we agree that clients who pay a significant amount for financial advice are more likely to assume that the provider is acting in their best interests, we also believe that clients understand that the payment of a fairly token amount for assistance falls in a different category from paying for fully-charged comprehensive advice.”
It felt charging a nominal amount for ‘good advice’ would foster access to affordable advice by regulating demand and priortising those who were willing to pay the fee.
“If the regulations are only relaxed for free advice, there may be an increase in free advice given, but we may find that (in percentage terms) there is no increase in the amount of advice which is acted upon and an increase in wait times (or a loss of access) for other potential clients who are highly committed to obtaining and acting upon the advice,” it said.
