Rest details advice plan: Digital tool accompanied by ‘phone-based’ advisers

21 February 2024
| By Maja Garaca Djurdjevic |
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Rest plans to offer its members a collectively charged digital advice tool, as well as access to phone-based ‘qualified advisers’ to assist members in adopting the digital process.

Rest supports the proposed introduction of a new class of financial advice provider, it said in its submission to government on the retirement phase of superannuation.

The super fund, which boasts some 2 million members, believes funds play a “vital role” in providing “simple, accessible, valuable information” to empower members approaching retirement with greater confidence.

As such, following the legislative creation of a two-tier advice system, Rest plans to support its members by enhancing its current three layer advice system, which includes education and online calculators as layer one, followed by a digital advice tool as layer two. Layer three includes "personal advice" provided by “phone-based” advisers, incorporating collectively charged and individually charged advice.

Rest initially launched its digital tools suite in 2017, offering collectively charged, intra-fund advice on voluntary contributions, investment choice and insurance.

“It is vital that people can choose from a range of advice and guidance services, scaled in both complexity and cost,” the fund said.

“We believe that by removing current regulatory obstacles and improving communication and engagement with members, it is possible to facilitate the crucial shift in member mindset. This shift could lead to increased levels of engagement and confidence among retirees when it comes to planning their retirement and drawing down on their superannuation.”

In the submission, Rest argued that constraints that have been placed on funds’ ability to provide advice have led to anxiety among members and rash decision making in retirement.

While the Retirement Income Covenant clarified the balance between providing assistance and potentially contravening hawking restrictions, the fund said other major restrictions remain.

“Some remaining limitations include that under existing conditions for providing intra-fund advice, funds cannot take a member’s household circumstances, including income, superannuation, and debt, into account when providing guidance,” the fund said.

“This limits the effectiveness of this type of advice.”

As such, Rest sees it as crucial that advice topics that can be offered via collectively charged models are expanded.

“The proposed expansion of the advice topics that can be offered via the collectively charged advice model will allow Rest to provide more impactful and beneficial retirement advice, including being able to consider household circumstances, being mindful of the cost and model, and Rest’s overall obligation to act in the best financial interests of members,” the fund said.

Moreover, on the proposed introduction of a new class of financial advice provider, Rest said: “These new advice providers could be an effective avenue to assist members who are adopting digital advice to validate any concerns with a human adviser before proceeding with the implementation process.”

Citing Investment Trends data, Rest said only 11 per cent of Australians aged 55–64 are likely to implement digital advice without validating with a human adviser.

Additionally, the fund suggested that, to support retirement planning engagement, the government should communicate with all Australians prior to reaching age pension age, providing guidance on how to apply and where to go for help, such as Financial Information Service (FIS) officers or financial advisers.

“This approach would prompt more individuals to apply for the age pension and potentially seek advice about their retirement needs,” the fund said.

In December, Financial Services Minister Stephen Jones said he supports the creation of a new class of financial advice providers, essentially granting funds, banks, and insurers the ability to give customers personal advice.

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