‘Strong, honest friend’: UniSuper advisers hold fund to account

UniSuper head of advice and education Andrew Gregory says he wants the $115 billion industry fund to become a “home for advice professionals”.

The former CEO of boutique firm Arrow Private Wealth and general manager at MLC Advice, who joined UniSuper a year ago to set a new financial advice strategy, has received a mandate from the fund’s board and senior management to grow its financial advice footprint.

Relative to other profit-to-member funds, UniSuper – which until July 2021 was restricted to members in the tertiary education sector – already has a sizeable adviser workforce of about 160 full-time equivalents. Of those, 52 are licensed by UniSuper to provide comprehensive advice, while 37 so-called “superannuation consultants” provide general advice and 19 are limited to intra-fund advice.

But Gregory says the fund is acutely aware it needs to provide more advice in order to meet its obligations to help members transition to retirement under the retirement income covenant. Its origins in the universities sector means full-scale advice is a more natural fit than it is for other funds, he says, with a membership that has the ability and propensity to pay the going rates, which range from $3000 to $6500 for a comprehensive plan.

“The nature of our business is one where advice and education is highly valued, if you think about the heritage coming out of education and research,” he tells Professional Planner.

“The starting point [of my strategy] was a huge privilege that advice matters, and advice is one of those core competencies within UniSuper. Unlike others, we’re wanting to double down in advice.”

Scale, ability, patience

Gregory says large industry funds can help fill the education and training void left by the big four banks, who traditionally ran the academies and provided a career pathway from other corners of financial services to comprehensive advice before retreating from wealth management in the so-called Wexit following the Hayne royal commission. He is eager to develop a graduate and Professional Year program as a priority.

“I think we’re one of the major players to do this,” Gregory says. “We’ve got the scale, we’ve got the ability, we’ve also got the patience to see the long-term benefits of taking people from the beginning of their careers right through to a flourishing career in advice.”

He said recruitment and promotion of female advisers was a specific priority, especially given the fund has a majority female membership.

In order to grow the advice business, Gregory acknowledged he may have to shake off some perceptions of super fund advice broadly in the profession. Chief among them is the arguable conflict that exists within a fund, which is a financial product, giving advice around superannuation.

Gregory says he not only understands this “critique of vertical integration” but admits he was a “bit worried” about what the reality might be before he took on the UniSuper job.

“I’ve been really pleasantly surprised with the discretion that they’ve afforded the advice business,” he stresses. “They can be professionals. They can be fiduciaries. We’re not under any obligations or pressure.”

“It’s something that really matters to me… that I do have a home for advice professionals and can allow them to be able to use their judgment.”

Digital dalliance

He says the advice business maintains an independent APL, with a range of rival ARA-regulated super funds represented, both industry and retail. He also says UniSuper advisers are “absolutely” willing and able to advise members to leave the fund if necessary, describing them as a “strong, honest friend” that can hold the fund to account and provide feedback on what competitors may be doing better.

“We would categorically say that we provide advice that’s in the best interest of the members,” he says. Although he adds the usual caveat favoured by industry fund executives: “the thing that I will note is UniSuper has been voted for number one super fund for low fees and highest returns.”

The clear implication is that advice to switch funds is relatively rare given the fund believes it stacks up on any measure.

Gregory says he wants hybrid financial advice to form part of the fund’s advice strategy, but has so far resisted putting too many eggs in the pure digital advice basket. While some other funds have incorporated digital or robo-advice into their processes, Gregory says he is not rushing. Indeed, he suspects some competitors may wish they had “slowed down” before selecting a partner and beginning to integrate.

“I don’t want to pursue a vendor strategy,” he says.

“Before I go and engage in an external digital advice provider, I need to make sure I’m really clear on what the funds business requirements are. Otherwise, we run the risk of following their strategy and sort of fitting in because it feels convenient.”