FAAA backs AustralianSuper advice move

The Financial Advice Association Australia (FAAA) has welcomed AustralianSuper’s decision to expand financial advice for members, describing the move as recognition of the growing importance of accessible advice while highlighting unresolved regulatory questions around digital advice services.

In a LinkedIn post following AustralianSuper’s announcement of its new advice model, FAAA chief executive Sarah Abood said the fund’s scale made its strategic decisions closely watched across the financial advice sector.

Abood said she welcomed the investment in member advice, noting the challenge of delivering advice at scale.

“I’m pleased to see the biggest fund investing in more financial advice for their members. Clearly, they understand how vital advice has become, and it’s no small task to make it available to their millions of members,” Abood said.

AustralianSuper recently announced it would launch a personalised digital advice platform through a new entity, AustralianSuper Advice, with the service initially covering areas such as investment options, voluntary contributions and retirement planning before expanding over time.

The fund has appointed Quality of Advice Review (QAR) chair Michelle Levy as an independent director of the new advice business, which is a significant development in the industry.

After reportedly speaking with AustralianSuper to clarify details of the changes, Abood said the introduction of the new digital advice tool, developed in partnership with Ignition Advice and operating under the AustralianSuper Advice licence, was the most significant aspect of the announcement.

While welcoming the development, Abood said questions had already emerged about whether digital advice services should eventually contribute to industry levies such as those funding ASIC and the Compensation Scheme of Last Resort (CSLR).

“We’ve fielded questions on whether these digital advice tools will contribute to levies like ASIC, CSLR and so on – and the answer is, at the moment, they don’t. This is something that we’ll need to take a closer look at, as these tools get more powerful and in future might advise more consumers directly without a human adviser involved,” Abood said.

They will likely play a key role in shaping the conversation around these issues as the financial advice sector continues to evolve.

Abood also noted Levy’s involvement in the new advice entity, alongside AustralianSuper’s plans to progressively bring its intrafund advice capability in-house, which is a significant step for the company.

More broadly, Abood said the announcement had highlighted ongoing confusion about the advice services superannuation funds can already provide, with many funds having in-house advice teams, such as UniSuper and Aware, that offer these services to members.

“Many super funds have had in-house advice teams for years – I’ve been quite surprised at the number of people who weren’t aware that super funds can already offer this service – it’s just that this advice can’t all be collectively charged, in which case members pay individually,” Abood said.

The FAAA is focused on the federal government’s upcoming policy announcements, particularly around CSLR funding and broader advice reforms, with Abood awaiting Minister Dr Daniel Mulino’s announcements next Wednesday at the National Press Club.

“We’re hoping for fixes to CSLR funding, and targeted reforms to stop aggressive lead generation activities aimed at peoples’ super,” Abood added, as they prepare for the upcoming announcements.

It is a significant moment for the industry.