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Advice key to member retention
Superannuation funds which deliver appropriate advice are more likely to succeed in retaining members, according to the latest analysis from actuarial firm, Rice Warner.
The analysis draws on findings from the company's survey of Australia's 45 largest superannuation funds, by funds under management, and suggests that they need to closely examine their advice offerings in the context of their broader member engagement/retention strategies.
Thee Rice Warner analysis points out that ageing fund members approaching retirement typically require financial guidance, and will willingly seek it outside of their fund.
"Should the member go outside their fund for help, and approach their accountant, for example, he or she may end up exiting the fund in order to commence a self-managed super fund," it warns.
The analysis said that, across the major funds, current advice models included any combination of in-house and outsourced advice services and these included fully in-housed to fully outsourced services, and all manner of variants in-between.
"Our report shows that Funds are now reviewing these models to determine the most appropriate combination in order to service and engage members, and allocating the most efficient use of resources," it said.
The analysis said that, in general terms, the supply of quality financial advisers presented an issue because, "currently there are not enough financial planners in the industry to service a sudden spike in demand from funds for face-to-face advice".
"Rice Warner sees a clear opportunity for superannuation funds to redouble their efforts in delivering quality financial advice that addresses the demands of these members," it said. "Better advised members are more likely to remain "sticky". In other words, advised members are less likely to exit the fund."
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