Accreditation to provide age advice should be required: ASFA

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It’s absolutely vital that people will have future access to specific retirement advice, says the CEO of the Association of Superannuation Funds Australia (ASFA) in response signalled changes to the age pension.

Pauline Vamos would like to see the development of a special accreditation that advisers who wish to provide age advice would be required to have.

“The current standards are the minimum. It’s time for the government, the regulators, and the industry to come together and say, ‘how can we ensure the right qualifications are developed in this market?’” she told Wealth Professional.

Vamos’ comments come in response to Treasurer Joe Hockey’s recent speech in Washington DC that signalled that the Australian Government is considering raising the retirement age and cracking down on the eligibility for the age pension.

Over the next decade spending on the age pension was predicted to increase by close to 70% due to the ageing population.

“The IMF fiscal report released just a few hours ago identified that Australia’s increased healthcare and pension spending alone, based on current settings, would mean an extra $93bn of government spending per annum by 2030,” Hockey said. “That is the equivalent of an extra $61bn a year in today’s dollars, or the equivalent of an extra 4% of today’s GDP. To pay for the growth in health and pension expenditure, the government would need to raise the equivalent of the existing company tax.”

And he has confirmed that the pension age could rise to as much as 70, reported the Sydney Morning Herald.

Vamos said that the potential rise is a difficult conversation but one that needs to take place because the current system isn’t sustainable as people are now living much longer.

What we need to do to prepare is make sure older workers will have access to further training, job flexibility, support, and career counselling, she said.

“We don’t want people having to start up their own company just to work. A lot of people do retire because they have access to the age pension so there’s no doubt that money is a driver, but then a lot of people keep busy and go into volunteer work. I haven’t seen any research which really looks at the number of people working at age 60 – we do know there is age discrimination which is something we need to fix.”

An in-depth impact assessment of the consequences of raising the age pension needs to be undertaken so we can alleviate any potential ramifications in advance, she said.

Financial advisers should also start building in a flexible risk management plan into their advice structure because the whole nature of retirement funding is going to change. They should focus on helping people get the best out of superannuation by consolidating accounts, looking at income streams, and reviewing insurance regularly.

“It’s absolutely vital that age advice or retirement advice is very specific – these are big financial discussions,” Vamos said. “What we’d like to see a focus on is developing special accreditation for those providing specialised [age] advice. This is something that should be led by the financial services industry. It’s about time that in terms of standards we don’t wait for regulators: we do it ourselves.”

SEE MORE:

Ways to structure financial assets to maximise pension

Retirement figures increase again

ASFA battles super change


 
  • Annoyed on 15/04/2014 10:09:29 AM

    The penultimate paragraph in this story really shows the government have no idea what Financial Advisers do in our profession. "we should start giving advice on consolidating super, income streams etc" We haven't all had our nose in the trough like politicians and are now faced with funding issues for the public. How about cutting spending on political members and working on a real funding policy that doesn't cause people to draw more resources on the health system because they are forced to work until death.

  • Rob Ferguson on 15/04/2014 10:29:28 AM

    I will undertake this accreditation just after my new Tax Agents accreditation to go with my SMSF Accreditation and my Credit Licensing and my Estate Planning accreditation and anything else some instant expert cares to dream up

  • GAB on 15/04/2014 11:38:03 AM

    I can't believe I didn't think of this...looking at super and income streams for clients. What have I been doing for the last 15 years or so? A specialist accreditation...okay, all those DFP subjects, undergrad and post grad degrees are worthless, don't know why I bothered. Oh wait...we have a national exam coming up soon if ASIC has there way.

    We'll all be really smart but have no time for clients.

  • Adviser B on 15/04/2014 3:49:04 PM

    Accreditation and extra education standards to teach advisers to make the advice they provide appropriate to the client's age. Genius.
    I personally never even think of a client's age when providing advice - in fact I never even ask it. All my advice is the same regardless of age, and it never occurred to me that age has ANY impact on the advice we give or anything financial.
    Mrs Vamos is brilliant for coming up with such a new and exciting idea.

  • Tim Shapter on 15/04/2014 5:04:53 PM

    I bet there is a carve out for industry superannuation funds and bank/retail fund call centers on giving advice, lets add to that accountants and solicitors and anyone else except financial planners. I have no idea what the FP industry will do with this one but it is about time we had some real representation by financial planners for financial planners and not product backed organisations. I would like to know if others feel this way after 20 years I am just about done..shame I love the industry and what we have and can do for Australians

  • Annoyed on 16/04/2014 10:21:30 AM

    Tim I agree we do need stronger pushback from the FP industry, in particular to Mr Hockey directly. We are the most over regulated industry in the country, yet there is still so much wrong with its reputation because of poor political representation by gooses like him and Shorten.

  • Innocent Observer on 17/04/2014 11:08:31 AM

    Here's an idea:

    Replace the current CPD framework with a 6-monthly online exam that covers the areas of advice that we each provide (with each module counting towards "accreditation" in that area). Say 5 - 10 questions in each core area, so maybe 60 questions for the average adviser.

    Set a "pass" rate of 80% (or whatever) and require a re-test for those who don't pass this hurdle.

    Surely in this age of technology this is do-able, simple, cost effective and would sure as hell free up a lot of time (maybe 1.5 - 2 hours every 6 months, instead of getting CPD points by warming a seat and being fed an alternating conga-line of chicken and fish)

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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