Late last week, QSuper announced it would be transitioning away from offering comprehensive advice to new customers.
As per its statement, QSuper explained that “demand for comprehensive financial advice from members and non-members was decreasing,” and as a result the service would no longer be offered to new clients from July 6. Existing clients will continue to be serviced for the remainder of their current period and will be "provided with assistance to ensure that their advice needs are met in the future."
QSuper CEO Michael Pennisi explained that the decision was based on “several years of data, member feedback and first and foremost, member needs.”
He added: “We have increased the number of advisers available for over the phone personal advice appointments and we have expanded the topics relating to our superannuation products they can discuss with our members at no additional cost to them.
“This is a great outcome for our members and will see more advice being delivered to more members and will meet the majority of our members’ advice needs about their QSuper accounts.”
As per the Australian Financial Review, the decision will result in at least 20 redundancies in August, with more potentially to follow if staff can’t be redeployed elsewhere in the business. New customers will be directed to a "significantly expanded" over-the-phone advice service which covers topics including account-based pensions, transitioning to retirement and retirement income projections.
This news occurs at around the same time that KPMG released a survey exploring the financial impacts of COVID-19 and the willingness of people to pursue financial advice. According to the research, 42% of people surveyed experience financial impacts from the virus and its associated effects - perhaps as a result of this, a majority viewed financial advice as a "discretionary spend."
Assuming the wider effects of COVID-19 - that is, outside of the health implications - continue to ripple through the Australian economy for some time, one can expect this trend won't be reversing anytime soon. KPMG partner Tim Thomas commented that the challenge for advisers is now to "turn [their] underlying potential into services that consumers are willing to pay for."
Interestingly, the report also found that younger consumers - especially those financially impacted by COVID-19 - are requiring financial services providers to be more "flexible in the services and products they offer," which perhaps reflects QSuper's statement regarding a reduced demand for comprehensive advice services.
It also mirrors FPA CEO Dante De Gori’s comments in the latest season of Future Talk, where he said that there needs to be more scope for advisers to address a “niche market” without offering the “full scale of services a comprehensive financial planner does,” and that “the regulations and licensing regime should allow that.”
Either way, though, recent developments suggest that even if lower-income Australians do want comprehensive advice, there may be fewer channels available to them now.
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