First our thoughts are naturally with all the clients and colleagues affected by the recent floods. In particular the many regional advisors who are working tirelessly and selflessly to help their local communities through these difficult times. It is at times like this that the real value of locally based advisors in the community can help with their years of experience and local knowledge. Hopefully Adviservoice can be a conduit for keeping us all engaged and involved in Industry issues. We would love to hear some stories of the real differences advisors are making in their local communities at this time.

Like many firms we are doing our annual planning and budgeting to meet our clients’ needs and sadly the uncertainty of the current Government’s proposals make this a difficult task with confidence in our legislators continuing to deteriorate. The proposed changes introducing ‘My Super’ were poorly thought through with the public expected to retain a standard asset allocation throughout their pre and post retirement years without the need for advice. This will be a recipe for disaster when adverse markets material affect returns in the short term and systems and advice processes are not valued and supported to help the public through these critical years. A better solution would have been to have focused on the excessive risk retirees are taking to get a acceptable return and to interface guaranteed income streams in retirement with social security benefits.

Similarly the proposed annual opt in provisions which started out as an ambit claim from Sussex St and became a rallying call for the ‘Industry Fund Network’ demonstrates a serious lack of judgement that it would even be considered. Having travelled and spoken in China, the US and UK in recent times I can confirm that no other pension market is considering such an extraordinary reckless act. Again a better answer would be to have free and fair competition and advertising between all sections of the marketplace. The level of advice needed for an Industry Fund Member which has an average balance of $20k would be different to a Self Managed Fund with an average balance of $450k, hence principles based legislation provides the flexibility to meet the customer requirements of the different market segments.

At the heart of the future retirement issues we face as a nation is the need to improve engagement with the public Could it be that the 80% of the public currently supposedly disengaged with super are the same ones who are not making personal contributions. Conversely could it be that the 20% who do actively contribute are the ones fully engaged and who wish to put in higher contributions than are currently allowed. To my mind we need joint contributions from both employers and employees to get adequate retirement benefits which again is common when you look at comparable systems around the world.

Well that’s how I see it so for me it’s back to the planning and budgeting. Hopefully some commonsense and commercial experience can be brought to bear and replace the mindless politicking currently being observed failing which we could seriously be looking at the ‘Balkanisation’ of the industry. It is time for good men and women to stand up and get this debate back on track the retirees of Australia deserve a lot better.

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