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Australians are reluctant to seek professional advice. According to the Productivity Commission, up to 80% of adult Australians have never used a financial planner or adviser yet 48% say they have unmet financial advice needs.
For past generations, financial advice was not such an issue. The average Australian worked, bought a house, raised a family and retired on the Age Pension. But the introduction of compulsory super changed all that.
Now every Australian with a super account is exposed to capital markets and the impact of market twists and turns on their account balance. They are also encouraged to fund their own retirement, so the performance of their super, how it intersects with the Age Pension, other investments and constantly shifting super rules really matters.
The growing complexity of our retirement system means most people will need advice to get the most out of their super and plan for retirement.
A matter of trust
The main reason people give for not seeking financial advice is cost, although the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry seriously dented the reputation of the advice industry. The commission unearthed conflicts of interest where advisers are rewarded for selling certain products whether they are in the client’s best interests or not, as well as systematic overcharging, hidden fees and fees for no service.
Not all financial advisers are guilty of these bad practices, but it is hardly surprising that people are wary of paying for advice, especially if that advice is conflicted.
The good news is that there is excellent, free advice available from government and community organisations.
In this article, we cover the government’s free Financial Information Service which is a great place to start if you simply need information. We also include financial counselling services for those in financial difficulty.
You may also be able to access free general advice from your super fund, or personal financial advice at a cost.
The Financial Information Service
The federal government’s Financial Information Service provides free information and education on a range of financial issues, from investing to superannuation, retirement planning, the Age Pension and aged care. The operative word here is ‘information’.
The service can’t offer personal financial advice, free or paid, because it isn’t licensed to do so. That means it can’t sell or give advice, prepare a financial plan, recommend investments, tell you how to invest your money or recommend a financial adviser.
But sometimes, information is all you need to make your next financial move or lifestyle choices.
What FIS can do is explain:
- How to make informed decisions about your finances
- The risks of certain financial products
- How you can increase your overall retirement income
- The roles of financial professionals
- How to choose a financial adviser.
FIS is operated by the Department of Human Services. It is open to anyone of any age – you don’t need to be a retiree or on Centrelink benefits.
You can phone and speak to a FIS Officer (FISO) or make an appointment for a free face-to-face consultation at your local Department of Human Services service centre. You can take someone along with you, allow someone to speak on your behalf (subject to signing an authority naming them as your representative) or request an interpreter.
FIS also holds regular seminars in capital cities and regional centres across the country. Topics include planning for retirement, understanding superannuation, the Age Pension, retirement accommodation options and aged care fees and charges.
I attended one of these seminars on the Age Pension to see first-hand how useful they were. At the very least, it provided an opportunity for the people who attended to start their information gathering, ask questions and identify issues to follow up, perhaps with a face-to-face interview with a FIS officer or their financial adviser.
Note: These seminars have been suspended temporarily due to COVID so call to speak to a FIS officer on the number below.
- Call 132 300 to speak to a FIS officer or arrange a face-to-face appointment.
- Call 136 357 to book into a free seminar.
For more information on the service and upcoming seminars in your state or territory, as well as online financial tools and guides, check the FIS website.
Financial counselling services
The economic impacts of the COVID health crisis have hit many Australians who may be facing financial difficulties for the first time in their lives. If you have lost your job, have reduced working hours, or are struggling to pay household bills for whatever reason, help is at hand.
Financial counselling services offer free, independent and confidential information, support and advocacy to people who are currently facing financial difficulty. They also provide support for people suffering more complex issues such as domestic violence, elder abuse or problem gambling.
These services are provided through a network of local community organisations, legal centres and government agencies.
If you have difficulty meeting repayments, can’t pay a bill or need assistance developing a budget to repair your finances, you can access services over the phone, online or in person.
To access free information over the phone, or to get a referral to a provider of free face-to-face services in your area, contact the Financial Counselling Australia National Debt Helpline.
The service also offers a range of user-friendly, step-by-step online guides.
- Call the Financial Counselling Australia National Debt Helpline on 1800 007 007.
- Go online to www.ndh.org.au.
If you feel you need financial information or counselling, free services are available from the government’s Financial Information Service or the Financial Counselling Australia National Debt Helpline.