As falling equity values due to the coronavirus spark panic-selling by superannuants, fault lines are emerging between advised and non-advised clients according to Sunsuper head of advice and retirement, Anne Fuchs.
Fuchs says one of the early trends she’s seeing is that – anecdotally at least – advised members “are not making rash decisions and switching to cash” at a low point in the market.
Over the last week or two, however, the picture is less reassuring for members that do not have a financial planner. Fuchs says it has been “sad” to watch a procession of members selling down their assets in response to the market falls and crystallising losses.
“Members here at Sunsuper that don’t have a planner are switching to cash and calling us for validation and we can’t give that,” she says. “Over the last week and a half there’s been a huge overwhelming flow of requests.”
Advisers, most of whom experienced the dark days of the global financial crisis in 2009, have spent years coaching their clients on how to deal with a crisis event; advised portfolios are more diversified than they were a decade ago and panic amongst clients has been minimal so far.
“Advisers have done a good job of advising clients, which is great news,” Fuchs says. “There were a lot of lessons learnt in the GFC and we’re a better prepared profession.”
According to Susan Bryant, principal and adviser at Seeds of Advice in Brisbane, the GFC provided a professional experience that has actually helped her become a better adviser.
“The GFC taught me to understand how clients think and feel a whole lot better,” she explains. “It gave me a quiet sense of self-confidence because you’ve been through that and you know how to handle that stomach-churning feeling.”
Looking back, Bryant adds, the GFC experience was a formative one.
“I’m very grateful for the fact that this career I’ve had has allowed me to build that level of self-confidence because clients are looking for leadership,” she explains. “It was the reason I started my own practice.”
Present and visible
Fuchs says Sunsuper is proactively trying to bridge the divide between advised and unadvised members by hosting education seminars online.
“We did a live webcast last week; 2800 members registered and 2000 watched to the end,” Fuchs says. “We used the GFC in 2009 as an example and we’re trying to do a lot of education about that. It’s a really cost-effective way to get information out there, you’ve got to be present and visible.”
One of the disadvantages of having so many people interested in their superannuation these days, Fuchs explains, is that they’re more inclined to make incorrect calls in the management of it.
“Back in 2009 they weren’t engaged, but now people are checking their balances too much.” She says.
Perhaps sun super should make it easier for advisers to work with Sunsuper and therefore give advice to sun super clients instead of being painfully difficult to deal with….