The Actuaries Institute has proposed creating a new category called “guidance” to help consumers with their financial planning needs.

It is one of many recommendations the institute made in its submission to the Quality of Advice review, which is expected to release its report to the Federal Government this December.

The institute says the proposed guidance category should be regulated differently from advice, meaning it will be provided in a more tailored and personalised way without it being regulated as personal advice when no recommendation is being made.

“The institute suggests the current situation of ‘all or nothing’ (i.e. all responsibility stays with the

consumer if they do not take advice or all of it transfers to the adviser if they do) may not match what all consumers need,” the submission says.

“We envisage a spectrum of help (information, guidance and advice) that could be offered to consumers – perhaps in the form of a ‘menu’ where each option has a commensurate regulatory burden depending on how much responsibility is being transferred from the consumer to the help provider.”

The institute says under the present advice model, the “guidance” layer of help is largely missing in practice for consumers who want tailored information, financial calculations and projections.

“The reason is that this help is now either being classified as personal advice under the current legislation which suffers from the supply side hurdles or can be easily perceived as personal advice so superannuation funds are very reluctant to provide this type of help,” the submission says.

The submission says research shows there is a common difficulty for consumers to apply general information to their own circumstances.

“Ideally, to assist members make informed financial decisions superannuation funds should be able to proactively provide guidance, based on a person’s circumstances, without such guidance being classified as personal advice as long as it does not contain any recommendation, although it would often be intended to influence the person,” the submission says.

“This will allow funds to better act in the interest of members.”

The submission says the proposed guidance category can be made consumer-friendly and relevant to members through the incorporation of personal information and a consumer’s financial situation, which will help members navigate through the difficulty of filtering generic information that can be overwhelming to them.

The guidance can be provided through all possible channels such as phone call, online member portal or an app.

The submission says this could also apply to other financial decisions that a member can make through his/her superannuation lifecycle, including but not limited to choosing insurance cover, making voluntary contributions, whether to roll over from accumulation phase to pension phase and what retirement solution or product to choose.

Click here for the submission.