Aware Super chief executive Deanne Stewart backs sector reforms in the Levy report

The boss of one of Australia’s largest super funds has strongly backed financial advice reforms, warning those planning for retirement are being short changed.

Aware Super chief executive Deanne Stewart.

The chief executive of one of ­Australia’s largest superannuation funds Aware Super’s Deanne Stewart has strongly backed the recommendations of the Levy Report into financial ­advice laws, warning that consumers are suffering from lack of access, particularly those planning for their retirement.

She said the recommendations by the Allens’ partner in her report “got to the heart of the problem”, warning that the financial advice industry, which has seen the departure of thousands of professions over the past few years, was now “on life support”.

Ms Stewart, whose fund manages about $150bn in assets, making it the third-largest industry super fund in the country, said it was important that critics of the report were not “stuck in the past” with their concerns about financial advisers. There had been considerable regulatory advances since the events that prompted the establishment of the Hayne Royal Commission into misconduct in the financial system in December 2017, she said.

“She gets to the heart of the problem, which is that advice has become unaffordable and inaccessible for the great majority of Australians,” Ms Stewart said.

She said the report “strikes the right balance” between making ­financial advice fit for purpose and consumer-friendly, while still having consumer protections.

Releasing the report last week, deputy Treasurer and Minister for Financial Services Stephen Jones said the government would consult widely in response to the report’s recommendations.

If accepted, the report’s recommendations could pave the way for a considerable expansion of the superannuation funds in the advice sector.

Aware has some 100 advisers on staff who can provide comprehensive financial advice. But Ms Stewart said many people in super funds could not afford to pay the thousands of dollars needed for detailed professional financial advice and often only wanted answers to simple questions. “The financial advice our members want from us is not always complex or comprehensive,” she said. “Yet, under the current rules, they face frustrating hurdles that block them from accessing the answers they seek, often at a time of great need.”

Critics of the recommendations in the Quality of Advice report, who were concerned that it would water down consumer protections, should remember that there had been many changes to the regulations around the financial advice and financial services sector in recent years. “There are definitely a lot of alarmist voices out there who are not necessarily considering the degree of change and the degree of regulation which is now in place that is there to help protect consumers.”

Changes have included anti-hawking regulations, “duty of care” obligations on superannuation funds, which are also required to act “in the best financial interests” of their members, the introduction of stricter professional standards for financial advisers, design and distribution obligations on providers of financial products and “emboldened ­financial regulators”, which were quicker to act on any instances of perceived misconduct.

It was 12 years since the events that led to the royal commission. “Since then, we have had regulation upon regulation upon regulation, and the royal commission.” While some changes had worked well, now the advice industry was “on life support”, she said.