Speaking at the FSC Summit 2018, Department of Treasury division head for retirement income policy Robert Jeremenko said comprehensive income products for retirement (CIPRs) should be designed so clients won’t need advice to use them.
“The government wants to establish this in a way that the offer of a CIPR would not be financial advice, so that means we need to look at what the definition of intra-fund advice is going forward to accommodate that,” he said.
“In and of itself, the offer of a CIPR is not financial advice.”
Consequentially, Mr Jeremenko said government would not be mandating that clients seek advice prior to their decision to take up a CIPR.
“The whole idea is to make sure they are provided with the right amount of guidance to members and retirees such that they may not need to take financial advice; they can choose too but we don’t want to mandate financial advice within the taking up of a CIPR.”
Rice Warner last month expressed concern over the “structure and implementation of the proposed CIPRs framework”, cautioning that the recommendation of CIPR products should fall under the AFSL regime and not be left to intra-fund advisers.
“We are supportive of increased member engagement to assist members to better understand how they can meet their financial goals in retirement, however, we are concerned that the paper states that trustees could provide this guidance without financial advice,” the company said.
