The Banking Royal Commission is a game changer

The combination of the Royal Commission and the recently published report by the Productivity Commission about superannuation funds means that this time there won’t be a return to “business as usual” in super funds and financial planning businesses.
While there have been media reports of bad experiences for some people dealing with financial planners and super funds, we should remember that the great majority of clients don’t have horror stories and this fact doesn’t get much media coverage. The sins of a few certainly impact on an entire industry and it’s likely that many people, who could benefit from good financial advice, will be reluctant to talk to a financial planner.
Undoubtedly there’ll be more regulations for the Financial Services Industry to comply with and the educational standards for Financial Planners will be made a lot higher.
When it comes to superannuation funds, one improvement that’s long overdue is their tendency to treat retirement in purely financial terms. Now their prime responsibility is to help their members accumulate money for their retirement, but that doesn’t mean that that’s all they should think about. Most people who have retired would have discovered that there’s more to a happy retirement than good money management and super funds know that lifestyle issues are important. Unfortunately, most of them have chosen to ignore this inconvenient truth.
If you check most super fund sites, you’ll see plenty of information about finances and insurance, but only very few have any relevant retirement lifestyle information. Obviously the money is to be made in having members’ funds under management and selling them insurance, but that doesn’t mean that funds should ignore lifestyle issues simply because they can’t make money out of them. It’s very disappointing that most super funds web sites claim to be preparing their members for a new life after work, but then promote the fallacy that having enough money will ensure a happy retirement.
The result of the superannuation industry largely ignoring lifestyle issues has meant that most people who are approaching their retirement also only think about financial planning and often struggle when they are confronted with non- financial challenges like boredom, living with their partner 24/7, loss of identity or loss of purpose just to name a few of the issues that many people are faced with.
Superannuation funds would be doing their members a big favour if they took a more realistic view of life in retirement and provided both financial and lifestyle information to people approaching the end of their careers.