It’s perhaps no coincidence that as a Senate committee unearthed yet more shortcomings around financial advice some consumers would be spooked by proposed changes to super and negative gearing.
In Canberra we heard how planners sacked for misconduct were still at large in the industry, about the shortcomings of the current ASIC register in identifying identify these planners and at the need for a much better compensation scheme.
Senator Sam Dastyari and whistleblower, Jeff Morris, at the Senate hearings into financial advice
Many may wonder at the rate of bad news piling up if they if you should risk getting, or even keeping , an adviser to plan their financial futures.
Then in the same week came along a reason why, like it or not, you may decide you actually need the services a really smart planner. The Labor opposition unveiled plans for reducing superannuation concessions, and possible changes to negative gearing too.
Regardless of whether you think it’s an old-style ‘soak-the-rich’ plan ( Sydney’s Daily Telegraph ) or, an all-too-small step in super reform ( Sydney Morning Herald), who are you going to call? The Government says no changes in this term but given the time-frame of much of the advice you might get from a planner that might not mean much.
The Labor plans may be targeted at the better-off now but where might they end? And given your increasing wealth over time (hopefully) and the little detail the changes are NOT indexed for inflation how might you be caught up in that might happen.
Needless to say even a really smart adviser can’t answer all these questions but they can help you reduce the risk of being disadvantaged by any changes which might challenge your retirement income and investments.
So while whenever a politician flags such ‘reforms’ it may be an incentive to seek some or more financial advice. But wouldn’t the doubts cast into the marketplace by the Senate hearing and everything before it act as a more powerful disincentive?
It would be easy to think so but none of this much helps the consumer who knows they need advice but doesn’t know where to go or isn’t confident of finding it.
There’s consensus around boosting confidence with more professionalism and higher levels of education but this will inevitably take time. Meanwhile given the parlous budgetary position more potentially costly changes for those who are better-off and older are going to be proposed.
Where are they going to go for advice?
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