The proposed second tier of so-called “qualified advisers” could help super funds deal with insurance claims quicker and with more personal member care, the Investment Magazine Insurance in Super Summit has heard.
Australian Retirement Trust head of advice, guidance and education Anne Fuchs said that the new type of advisers would potentially assist super fund members when they make a claim.
“I do wonder whether this new class of financial adviser presents an opportunity for us to help our members,” Fuchs told the summit.
Minister for Financial Services Stephen Jones told the summit claims handling had improved, but it’s “a bit early to claim success”.
In December 2023, Minister for Financial Services Stephen Jones unveiled his version of a two-tiered advice model based on the Quality of Advice Review recommendations, proposing a second-tier of adviser controversially dubbed “qualified advisers”. This new class of advisers would be unable to charge a fee or receive commission based on the advice they provide.
Fuchs said these advisers could help members by being there to “hold their hand” through the insurance claims process.
“And they don’t need to go and speak to a plaintiff’s law firm because they feel like there’s somebody who was by their side to advocate [for them],” Fuchs said.
However, Fuchs noted this will still need to be done in conjunction with a digital advice behind the scenes to help with service.
“There’s something quite exciting about that because we’re not going to pluck all these qualified professional advisers out of a hat, but maybe we can create a new generation of practitioners through this new class of adviser,” Fuchs said.
The summit had earlier heard that delays in handing claims remain the number one cause of complaints about superannuation received by the Australian Financial Complaints Authority (AFCA) and that members could benefit from the presence of an advocate within the fund to help guide them through the process. The creation of “qualified advisers” could help super funds fill that role.
UniSuper head of financial advice and education Andrew Gregory noted the heritage of the fund is education, meaning it is incumbent on them to be able to deliver education as a service to members.
“[Our members] have got simple questions that often lead to very complex answers and a lot of paperwork,” Gregory said. “They’re looking for guidance, help, education and ultimately advice.”
“Qualified advisers” could give funds such as UniSuper a helping hand when it comes to educating members about insurance.
The summit heard that a lack of basic financial literacy in the Australian community is a fundamental issue insurers and super funds must work together to overcome.
MetLife Australia’s head of external affairs and public policy Nathan Rees told the summit that half of Australians currently fail tests of financial literacy yet around five million people will soon be retiring with little knowledge about their financial situation.
He highlighted the funds’ responsibility to improve the education of members about retirement and insurance, as many people don’t know the basics.
“We do need as a country to sort out financial literacy and the provision of advice at scale because people need it,” Rees said.
“The biggest financial decision you make in your life will be what you do with your money at retirement.”
KPMG Australia national sector leader of asset and wealth management Linda Elkins also referenced financial literacy and said that part of the funds’ job was to understand where to introduce friction into the insurance process to ensure that the member does stop because “proceeding on your own may in fact be a dangerous path”.
“Where do you need to build the friction when everyone’s aiming for frictionless immediate fulfillment?” she said.
