The Financial Planning Association of Australia The Financial Planning Association of Australia

FPA urges Government to consider importance of the long term interest of super in Australians’ retirement preparedness

 FPA also reinforces push for tax deductibility of financial advice

The Financial Planning Association of Australia (FPA) is urging Government to consider policy decisions that support and encourage today’s working Australians to become self-funded in their retirement

FPA CEO, Dante De Gori CFP®, said the FPA has made Government submissions regarding the 2016-2017 Federal Budget and The Objective of Super, recommending options that aim to improve the financial situation of all Australians and help them build a better financial future.

“The FPA supports policy that is in the best interests of Australians in the long term. We believe that strengthening the retirement preparedness of Australians should be a high budget priority for 2016-17, and setting the objective of the superannuation system will be key in doing this.

“The FPA believes that having an agreed objective for superannuation is critical to building trust and confidence in the superannuation system as a whole. The objective of super proposed by the FSI recommendation needs to have an ambition for Australians that is higher than the Age Pension. Our superannuation system should provide as many Australians as possible with a comfortable standard of living in retirement, so that Australians can live with dignity and independence,” said Mr. De Gori.

The FPA has proposed that the primary objective of super should be to provide income and capital in retirement to provide a comfortable standard of living. “Our proposed objective supports income provisions as well as supporting the need for flexibility as to the form in which benefits can be withdrawn. We believe this objective supports a higher target standard of living – a comfortable living – than currently afforded by the Age Pension.”

Mr De Gori went on to say that in addition to setting the objective of super, the FPA recommends the Government should not make negative changes but rather make positive and constructive changes that reflect the primary objective of super and reduce Australians’ reliance on the social security system. These policy measures include:

  • Removing restrictions on the superannuation contribution age
  • Removing superannuation guarantee contributions from the concessional contributions cap
  • Reinstating the levels of the concessional contribution caps to allow flexibility at older ages when the capacity to contribute is higher

Mr De Gori also addressed the importance of increasing the number of Australians receiving financial advice.

“Currently, only one in five Australians access financial advice, and even less receive this advice from a professional financial planner. The Federal Government needs to address this issue by including Budget measures which improve affordability and access to financial advice, such as making upfront financial planning fees tax deductible. This would incentivise Australians to take the first step towards organising their finances on a strategic basis.

“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, which is important for the long-term economic welfare of Australians,” he concluded.

The FPA is hosting a webinar for FPA members on the 2016-2017 Federal Budget. The webinar will take place on Wednesday 4 May, 2:30pm-3:30pm AEST and will help members understand how the budget announcements could affect financial planners and clients. For more information about the webinar, click here.

For the FPA’s full submission to the 2016-17 Federal Budget, click here.

For the FPA’s full submission to the Objective of Super, click here.