Financial future of Australians should be considered in the Federal Budget
The Financial Planning Association of Australia (FPA) has made a submission to the Australian Federal Government regarding the 2015-2016 Federal Budget addressing key policy issues, chief among them ensuring a solid financial future for Australians into retirement and improved access to financial advice.
Key priorities that the FPA called out in its submission are:
- Encouraging a savings culture and improving Australians’ retirement preparedness to reduce reliance on the social security system;
- Improving access to financial advice for those Australians who are most in need of assistance in managing their financial affairs; and
- Removing inconsistencies in the tax system.
CEO of the FPA, Mr Mark Rantall, said the recommendations are in line with the FPA’s ongoing goals, “Our recommendations will ensure Australians have a strong financial future based on financial knowledge from experts. It is important for Australians to understand the benefits of superannuation and have access to financial literacy to maintain consumer protection.
“To do this we recommend changes such as making upfront financial fees tax deductible, similar to how consumers access accountants, giving Australians further incentive to seek financial advice.”
Mr Rantall noted that only one in five Australians access financial advice, despite the fact that it contributes positively to financial literacy, social inclusion, and economic outcomes. He believes that it is up to policy makers and associations such as the FPA to help reduce the barriers to advice, to ensure that more Australians seek the help of trusted professionals.
“Investment Trends research shows that 30% of consumers who are not interested in seeking financial advice cite high cost of advice as a deterrent. It is clear that policy intervention from the Government is key. Making financial advice more affordable for consumers supports the Coalition’s superannuation policy to encourage as many Australians as possible to actively plan and save for their retirement, take full advantage of the benefits the superannuation system provides and work toward a self-funded retirement,” he said.
To support its Federal Budget proposal, the FPA recommends that the Government engage the Productivity Commission to examine the short-term and long-term position of the Budget if the preparation of an initial financial plan and ongoing fees were tax deductible.
Mr Rantall concluded saying: “Our Budget recommendations go hand in hand with our ongoing advice and policy work around higher education standards and the CFP® designation, as well our focus on greater professionalism in the financial planning sector.”