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Advice integration missing link in super funds
Superannuation funds may have established online financial advice as part of their offering but gaps remain in how they have integrated this with their face-to-face advice services, according to Link Advice.
The Link Group advice arm’s chief executive, Ross Bowden, said integration of data collected through online advice channels with advice services offered by planners was the “holy grail” of financial advice but this was lacking in super fund offerings thus far.
“Some funds who have put in online advice capability over the last few years, it is so standalone, it is not integrated,” Bowden said.
“If a person goes on and does three or four pieces of advice and modelling, no one ever calls them. There are not too many funds that have done it but there are a few funds that have set up online advice capabilities but it never goes anywhere. It just ends.”
Bowden noted that retail funds have embraced this integration more so than industry funds but said this was due to more resources available to the likes of larger banks such as “armies of financial planners”, which they could refer clients to, but he said industry funds would embrace it more in the near future.
“I think generally the superannuation industry is becoming more and more competitive so funds are just becoming a lot more serious about how they engage members,” he said.
Moreover hurdles such as cost and adapting to regulatory changes such as MySuper prevented funds from focusing on digital transformation.
However, funds must focus on continuously storing and utilising data to identify opportunities to engage with members and advise them on super strategies, Bowden said.
“Being able to go in like on an Empirics system and say ‘who has entered into a TTR [transition-to-retirement] in the last five years and who doesn’t have an adviser?’ bang, I can get that in two minutes,” he said.
“It takes a little longer, then, to craft a message and send a message out but hey, people like that."
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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