Actuaries Institute calls for reforms to expand affordable guidance

The Actuaries Institute has released a framework to help super funds deliver affordable guidance and advice to millions approaching retirement.

A new framework released by the Actuaries Institute has aimed to help millions of Australians, particularly retirees, access affordable financial guidance and improve decision making around superannuation and retirement.

The Help, Guidance and Advice (HGA) framework sets out how financial institutions, including superannuation funds, could provide a structured range of quality and affordable support to members and customers.

Chair of the Institute’s HGA Working Group, Andrew Gale, said the framework would ensure people can access everything from basic financial facts to guidance on retirement goals and comprehensive personal advice.

“Middle Australia stands to benefit most because comprehensive personal advice is out of reach for many, but help, guidance and specific purpose simple advice at pivotal moments would significantly improve their financial wellbeing,” Gale said.

He said the framework provides “the architecture that will enable millions of people of all ages to receive support in different levels of complexity and that fits their individual needs”.

“We have a tsunami of retirees coming over the next decade, but many don’t want or need or cannot afford full, comprehensive financial advice,” he said.

“Giving them help and guidance on common issues – such as Age Pension entitlements, and how to think about paying down debt and moving superannuation to a retirement phase account – would allow them to retire with greater confidence.”

Gale added that younger Australians would also benefit from improved access to support, including help on consolidating superannuation accounts, budgeting, and understanding life insurance needs.

The institute’s paper, Financial Advice Reform and Help, Guidance and Advice, followed extensive consultation with superannuation funds, consumer groups, and industry and professional bodies.

If implemented, the framework would expand the capacity of advisers, accountants, super funds, and digital tools to provide affordable support, including to the estimated 710,000 Australians intending to retire within five years.

Gale said the HGA framework is needed because current regulations treat all financial advice as equally complex, failing to distinguish between simple guidance and comprehensive planning.

“Guidance currently operates in a regulatory grey area between Help and Advice. It provides an important bridge between providing someone with basic financial information and personalised advice,” he said.

“It is widely seen as a scalable and cost-effective mechanism for delivering meaningful support.

“We would like to see greater regulatory and legislative recognition for Guidance so, for example, super funds and their trustees have more certainty in the support they can provide their members.”

Gale added that the Delivering Better Financial Outcomes (DBFO) reforms represent a positive step toward expanding affordable access to advice, but further changes will be needed.

“We also believe that further regulatory reform will be required post the DBFO reforms, particularly relating to the acknowledgement and greater utilisation of guidance,” Gale said.

The institute said it looks forward to the release of the DBFO legislation, describing it as “critical for increasing access to affordable help, guidance and advice.”