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(July-2003) Advice without FSRA headaches
MercerHuman Resource Consulting has a new offering out for super funds that would like to provide financial advice but don’t want to obtain an individual financial planning licence.
The offering, called Mercer Wealth Solutions, will be spearheaded by the former head of Mercer Investment Consulting Tony Cole.
Mercer CEO Simon O’Regan says it responds to the rising anxiety among trustees about members’ need for advice and their lack of confidence in advisers following the recent damning report on planners by the Australian Securities and Investment Commission and the Australian Consumers’ Association.
“The Financial Services Reform Act (FSRA) will make it harder for trustees to provide advice themselves and at the same time, there’s increasing demand for independent advice that puts members first,” he says, adding that Mercer believes that only five per cent of its super fund clients will actually seek a licence under the FSRA.
He also estimates that over 80 per cent of members’ education and financial planning needs can be met other than through expensive one-on-one sessions.
Mercer’s offering will leverage off its financial planning infrastructure, making use of its web site, call centre and seminars, which are already used by over 400,000 members in the Mercer Super Trust and in super funds run by Mercer’s clients.
To enhance the offering, Mercer’s service centre now employs some qualified financial planners who can provide limited advice over the phone. The company has been in financial planning for the past 10 years and employs 110 salaried financial planners.
Cole says other financial planners are typically commission oriented and service people at the end of their careers, rather than during their accumulation phases. In contrast, Mercer’s offering will help members at every stage of life.
“We think that at the early stages of life, there’s a lot of things that people need that they don’t need later, such as assistance in choosing the right mortgage and insurance options,” Cole says, noting that Mercer will also provide advice on estate planning, tax and the benefits and risks of gearing.
AUTHOR
Zilla Efrat
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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