Author: planners1

13 super funds failed the government regulator’s performance tests in the year ended 30th June 2021. Those funds were forced to write to their members, pointing out the performance failures and telling members to look at moving to higher-performing funds.

What is a person to do when faced with this sort of letter? Who can you turn to? What information do you need and how do you know your choices will be correct? There are so many questions for anyone receiving one of these letters. A number of media articles have highlighted the failures and the fact that only a small number of the roughly 1 million members of those funds, have actually shifted to another fund. The primary avenues for advice are:

• The ATO super comparison website
• The government sponsored website www.moneysmart.gov.au
• The government regulator APRA’s website
• The government www.yoursuper.gov.au website

These avenues are free.

If you wish to receive advice from a financial planner, there will be a fee payable. The financial planner will need to meet strict requirements for understanding your position, investigating options and presenting the results to you in a written Statement of Advice.

There’s a lot to consider.

For further reading, we have included below a link to an article on this topic written by one of our advisers, Michael O’Hara.

Legislation effective 1 January 2021 cancelled any adviser commission being paid from superannuation, investment and pension accounts. This change is in line with the industry Code of Ethics, which requires any adviser fees to be agreed to by a client under terms of “free, informed and prior consent”.

In other words, a ‘service agreement’ needs to be put in place for any fees and charges from your adviser. This agreement will set out any services and advice to be provided, along with the relevant fees.

There is an exemption for insurance policies, which can continue to pay a commission to an adviser, in much the same way that mortgages will often still pay a commission to a mortgage broker.

Many financial planners around Australia have reacted to these changes by setting minimum account balances that they will deal with for clients or setting a minimum “package” of services that will often exclude people who are seeking straight-forward or irregular advice.

Advice4me has attempted to navigate this change in the most flexible way possible, knowing that many clients are not used to paying fees in this way, and have been used to all costs and charges being covered by commissions earned.

Advice4me will work with you to establish a service agreement that fits to your budget and expectations. We will not demand a minimum account balance and we will not require you to lock into long term contracts, unless that is what you specifically want and it is appropriate to the services involved.

Since the transition, we have found that many people are happy to contact the relevant institution for their super, investment or pension accounts. Others have approached us after been frustrated by long wait times and difficulty getting answers from customer service people – who by law, are not allowed to provide personal financial advice. Our fees can accommodate a single query or ongoing help with one or all of your accounts.

This change from commissions to fees (whether paid directly or through a relevant product or policy) is one of the largest changes in the industry in decades. We understand the difficulties it can cause. If you encounter frustrations in trying to access financial services and advice, call or email.

We will generally reply to emails and calls within 3 business days or sooner, if you have already established a client service agreement with us.

On the 1st July just passed, legislation came into effect that required super funds to cancel the insurance for accounts that were deemed “inactive”.

If you were impacted, your super fund would have sent you a note in the time leading up to the 30th June 2019.

Some people have only just noticed that their insurance cover has been cancelled. If you are one of those people, and you wanted to retain that insurance cover – then there may still be an opportunity to do so.

Some insurance and super companies are allowing their fund members to have the cancelled insurance cover “reinstated” if the member asks within a limited time-frame after the 1st July.

If you are one of those people, please contact your super fund immediately to see if you have the chance for the cover to reinstated. If Advice4me is noted as your Adviser for that insurance or super then call and we will help you.

Here you will find updates and information from the people behind Advice4me.