Financial planners will be able to focus on their core skill of helping people grow their savings by investing more effectively for their future as a result of the changes announced by the Treasurer in last night’s Federal Budget.
Financial planners will be able to focus on their core skill of helping people grow their savings by investing more effectively for their future as a result of the changes announced by the Treasurer in last night’s Federal Budget.
Aviva Australia’s chief executive Allan Griffiths welcomed the changes to superannuation and announced that Aviva, through its key super investment platform Navigator, will cut fees for large balances as a result of the savings flowing on from a simpler super system.
“The simpler system will enable people to grow their retirement savings more quickly and we are keen to encourage people to do that through lowering our fees,” he said.
“Navigator has built up a reputation of being the first in the market with enhancements to super, for example the recent introduction of transition to retirement and contribution splitting. We also offer sophisticated tax management and the ability to rollover to the tax free pension phase within the same superannuation fund. We are extremely well placed for investors who want to take advantage of these new rules."
He said that as a result of the removal of significant complexity which has surrounded superannuation, financial planners will be able to focus on providing the right advice for individual circumstances.
“Successive governments have made the retirement saving legislation unnecessarily complex, which has turned financial advisers into legislative sleuths rather than investment advisers,” Mr Griffiths said.
“They have had to spend a great deal of non-productive time dealing with red tape. The superannuation plan outlined last night will now allow advisers to focus on their area of unique expertise – giving advice on investment decisions and growing wealth.
“Under the existing law, it is incredibly complex for an adviser to determine the most appropriate plan for a client. They been required to consider thousands of pages of legislation, examine spousal wealth, inheritances and the like.”
Mr Griffiths said that the changes to super make it even more beneficial for people to consult a financial adviser early in their working career.
“There will now be further incentives for young people to invest more into their super at an earlier age, with the removal of reasonable benefit and age based limits. By starting young they will be able to access the benefits of compound interest but they will really benefit if they consult a professional adviser who can help them work out the most effective investment strategy for their long-term needs.
“Australia is blessed with an industry of highly skilled financial planners. These advisers will soon be able to focus more on the accumulation side of the superannuation equation, rather than being so obsessed by maximising the draw down phase."
Mr Griffiths said the changes are a good first step. However, he called on the government to consider further changes which would be advantageous to those saving for retirement. The key further changes he called for are:
- Increasing the superannuation guarantee contribution to by 6% to 15% to enable so retirement savings to grow to a level where they can become more able to provide dignity when our working days are over and
- Funding an extensive superannuation education campaign to make all Australians aware of the opportunity superannuation provides them.
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Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world’s sixth largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$77.6 billion, and more than A$683.9 billion of assets under management (as at 9 January 2006). The group has around 59,000 employees and 30 million customers worldwide.
- The information in this document reflects Aviva Australia Holdings Limited understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. Applications to invest in a financial product issued by Aviva, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Aviva or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.