The $124 billion UniSuper is “ready to roll” with its strategy of expanding its financial advice offering to its members following the government’s response to the Quality of Advice Review, according to its head of advice and education, Andrew Gregory.
“We are ready to roll with our strategy for providing more advice and education for our members,” Gregory tells Professional Planner.
“We will be building expertise in retirement planning and building out proactive digital advice journeys,” he says noting it follows on from the fund’s plan to be the home of advice professionals.
Gregory says UniSuper, which has expanded from its roots in the university and education sector to cover a broader range of professionals and aspiring professionals, already had a strong commitment to helping its 620,000 members with financial advice.
The fund has some 150 advisers on staff providing a range of services from intrafund advice to full comprehensive financial advice and is one of the few funds with its own AFSL license.
Gregory says UniSuper was well down the track with stepping up its offering to its members once the new laws expanding the role of super funds in the advice area have been passed.
The proposals announced in December by Minister for Financial Services Stephen Jones will pave the way for a new category of adviser – the controversially dubbed “qualified” financial advisers – who can be employed by super funds, banks, insurance, and life insurance companies, and will be able to provide simple financial advice.
Gregory says he was surprised to see the Minister’s announcement that banks, and life and general insurance companies would also be able to have their own qualified financial advisers on staff as well as super funds.
However, he believes this would be “positive for the sector overall” as it would lead to the development of a large advice sector in Australia.
“It will allow for a big advice sector potential for all financial services businesses to grow,” he says.
“It’s a real turning point. It’s a really meaningful announcement which we welcome. I’m quite excited about it because it sets us up for the next phase.”
Serving the ‘missing middle’
Super funds have also been given permission to charge their member’s accounts for a broad range of financial advice and take into account the needs of the members broader family and outside sources of income including Centrelink benefits in their advice.
Gregory says UniSuper’s strategy would involve the development of a career path for financial advisers in the super fund sector and would see more use of “digitisation” in its offering.
He says the new laws would pave the way for the “missing middle” of Australians moving towards retirement to get financial advice and not just those who could pay the cost of comprehensive advice.
“At UniSuper we have a very proud history of our advice offering,” he says.
“It has been part of our DNA and is now core to the purpose of the fund. We know that good advice is the difference between an acceptable retirement and a great one.”
The government’s plans allows the fund to help people in the “missing middle”, Gregory says, referring to the people who wouldn’t ordinarily pay for comprehensive advice.”
“They may not have a large super balance and have been underserviced by the offerings that are in the market,” Gregory says.
“We want our members to benefit from good quality advice when they transition to retirement and that’s where we can play a role as a fund. Super funds should be providing more advice. It is a natural role for us and maybe even a responsibility.”
UniSuper’s cohort of members is older than some other super funds – one in six UniSuper members are going to retire in the next 10 years and one in five are headed towards preservation age.
Gregory says UniSuper was already one of the most advanced super funds in the advice space. “We have a deep heritage in advice. It’s a capability which has been within the fund for a while.”
He says the fund welcomed the idea of super funds being able to charge for a broad range of advice to their members and welcomed the idea outlined by Jones that super funds should also be able to “nudge” their members to consider taking action at specific times of their lives.
Supporting future demand
With 150 advice staff unlikely to be able to serve 620,000 members, Gregory says he did not want to predict how large the fund’s staff of advisers would grow to.
Its focus, now it knows the details of the Federal Government’s new laws, is on building out its broader strategies in the advice area.
“The reforms allow us to have a lot more confidence in building career pathways for advisers and to build out the technology and the competency which we already have behind our advice team and really think about the role super funds should play in advice and education of their members,” Gregory says.
He adds UniSuper would have a strong focus on “how we are digitising the business model of advice, as opposed to growing the human footprint”.
“It will be a hybrid approach,” Gregory says.
“We still believe that professional and qualified advisers have a vital role to play, but like every other firm, we will be looking at how we digitise certain aspects in order to [provide advice] at scale for a fund which has 620,000 members.”
The Minister’s announcement includes measures to encourage the provision of more digital advice with technology, considered a key element in providing low-cost advice at scale for funds.
Gregory says the changes could pave the way for super funds to play a more active role in providing financial advice for their members throughout their working lives over the longer term and not just around their retirement.
“We want to be able to provide help and guidance and advice through all the journeys that our members go through as a member of UniSuper in a way which fits together seamlessly and is personalised,” Gregory says.
The retirement income conundrum
Gregory says UniSuper was currently considering its response to a discussion paper put out in early December by Treasurer Jim Chalmers for ideas on how to improve offerings for members in the retirement phase.
He says UniSuper already offered a range of products for retired members including defined benefit offerings, annuities, and account-based pensions.
While the Chalmers paper raises the question of whether super funds should have to provide a default option retirement product, Gregory says UniSuper was a strong believer that retirement products needed to be personalised to take into account the individual circumstances of each member.
“We have a deep experience in retirement and advice and a strong belief that personalisation has a key role to play in this,” he says.
“We have quite a mature suite of products – from defined benefits through to longevity products – plus an Australia-wide advice offering which biases us to say that having a personalised approach to retirement can make a big difference.”
This article was edited on 11/1/24 to update Unisuper’s FUM to $124 billion and to clarify that the fund has 150 advice staff, not 150 advisers.