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Retirement calculators “must not advertise or promote” product

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The industry super fund sector has faced growing regulatory pressures in recent years, with the now departed Coalition government central to this, but both APRA and ASIC also becoming increasingly vocal. The introduction of the Your Future Your Super and stapling regulation has changed a fast-consolidating industry, with the Retirement Income Covenant having now come into force on 1 July 2022.

One of the biggest questions of pre-retirees and Australians in general, is whether one has enough to retire? Naturally, most turn to Google to ask these questions, which ultimately leads to retirement calculators offered by any number of financial institutions or super funds. The financial services regulator ASIC this week updated its guidance for those groups offering retirement and superannuation calculators in Regulatory Guide 276.

The challenge of offering these calculators is that they very closely touch on personal financial advice, in many cases giving people a specific amount of capital on which they could retire. Obviously, without context, this can be as dangerous as it is helpful.

  • Providing these calculators has been covered by Class Order Relief provided by ASIC, which effectively allows anyone to publish them as long as they meet some very specific guidelines. For retirement estimates, however, only superannuation trustees are authorised to offer these, likely due to the fact that they require significantly more data and analysis.

    Under the updated RG276, ASIC has made it clear that any retirement calculator “must not advertise or promote a specific financial product” and therefore must be agnostic to product. That is, a provider cannot providing modelling that says “by investing in Balanced Fund A you will have the following balance at retirement.” It is an important step for the industry with ASIC commissioner Danielle Press saying ASIC’s guidance “will give greater clarity to trustees about how they can use calculators and retirement estimates as part of their strategies under the retirement income covenant,” which came into effect on 1 July 2022.

    The updated relief will also provide greater flexibility in how trustees can give retirement estimates to their members, including through interactive tools. It introduces a single framework for setting economic and financial assumptions across both retirement estimates and superannuation calculators. We expect trustees that choose to provide these tools to do so in a way that fosters informed decision-making by members, without promoting specific financial products”.

    This latter point is important, with the RG being more prescriptive on what it terms ‘reasonable’ assumptions being used within these models. This also has implications for financial advice groups who may be offering these calculators to ensure they also meet the requirements.

    Providers will have a transition period of six months, during which either Class Order Relief can be utilised, with the new release coming into force from 1 January.




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