SMC welcomes consultation on adviser education, but urgent progress is also crucial on DBFO

The Super Members Council welcomes consultation on reforms to financial adviser education requirements as a constructive step to rebuild adviser numbers and expand access to quality advice for Australians, but urgent broader action is also needed to meet the scale of advice needs and strengthen consumer protections in super.

Improving entry pathways into the advice profession is important, particularly as more Australians seek trusted professional guidance to navigate complex financial decisions and plan for retirement.

When consumers aren’t able to access quality trusted financial advice, they are more vulnerable to predatory forms of lead generation and high-pressure sales tactics.

Education reform alone will not deliver the full protections Australian consumers need swiftly to prevent more Shield and First Guardian style collapses and it cannot close the advice gap for those with less complex advice needs, who become vulnerable to pressure selling.

Alongside its advice education reform, the Government must urgently legislate key elements of the promised Delivering Better Financial Outcomes (DBFO) reforms to expand safe retirement advice to Australians.

The DBFO advice reforms are a key consumer protection in themselves. By strengthening the ability of high-performing, tightly-regulated super funds which are governed by strong legal safeguards to deliver simple super and retirement advice to their own members, consumers will face fewer risks of lead generators luring them into higher-risk super products where they could lose their life savings, as happened in Shield and First Guardian.

Enabling access to affordable, targeted, simple advice and nudges at key life stages – particularly for younger people and Australians with smaller super balances and less complex advice needs – will boost engagement, strengthen financial literacy, and help them make good decisions about their super.

The DBFO reforms are key to deliver a comprehensive set of consumer safety protections in super.

The Council has called for a strong package of consumer protections that remove any conflicts of interest – including eradicating any hidden paydays – wherever they arise in the chain of complex entities across super, investment vehicles and advice, and strengthening safety obligations on any process that involves switching a person’s super.

It has also urged a ban on aggressive selling tactics through social media ads and cold calls by expanding anti-hawking laws to prevent contact aimed at generating or transferring leads for personal financial advice or super.

“Making it easier for new advisers to enter the advice profession is a sensible step – Australians need more access to quality advice they can trust,” says Super Members Council CEO Misha Schubert.

“But proposed education changes should happen alongside urgently needed wider DBFO reforms and a truly comprehensive set of stronger consumer protections.”

“Anything less than a comprehensive policy approach on consumer safety will simply invite the next Shield and First Guardian style collapses – this is no time for half measures.”