Data collection for trustees to develop retirement income strategies is a two-fold issue because of the need to collect en masse to develop broad based strategies, but individually to cater for those needs, according to Novigi.
Since the introduction of the Retirement Income Covenant, super funds have been required to develop retirement income strategies. However, according to regulators and the government, trustee response has been underwhelming.
In a webinar on Monday morning, Novigi general manager of market strategy and propositions Kevin Fernandez noted those comments from the regulator last year, which identified the data collection gaps funds have to develop retirement income strategies and the increase in work required.
“There’s this need to collect data en masse to develop strategies, but there’s also this need to collect data on individuals to make sure we can develop and match retirement income strategies for them,” Fernandez said.
“If we have that data, [then it’s] making sure we have the digital tools to give them that first step of advice and we have the logical processes and handover so that we can have the appropriate point to get them in front of someone where that’s necessary.”
Novigi senior partner Michael Quinn said part of the shift in data collection is because advice service are starting to become centralised within funds.
“It’s starting to shift where trustees are starting to take advisers in-house and have their own advice services,” Quinn said.
“That’s a little bit of pressure from the regulator on trustees, but regardless, as soon as you start thinking about superannuation investments and non-investments, the trustee doesn’t have that data.
“They can bring it into their remit within their office by asking members about it and ensuring members they’ll keep that to have a better picture of their overall financial wealth or wellbeing. That needs to be on the trustee to make that secure but readily accessible for those giving the advice.”
Fernandez said there is a massive data integration problem across parties within in the financial services ecosystem.
“You have independent advisers, trustees, product providers…everybody needs to share data,” Fernandez said.
While the Quality of Advice Review reforms will offer more flexibility for super funds to give advice, finding adequate staff to meet demand will still be an issue and Quinn said the future will still be a hybrid model.
Quinn said the service capability of digital advice platforms is “actually ahead of the market”.
“But their use is still relatively low compared to the number of account holders that we’ve got,” he said.
Quinn said funds have a “stronghold” on their customer list and there’s enormous potential for financial advice to start at the earlier stages.
“There’s an enormous potential customer list there for financial advice and financial advice should start earlier rather than later,” Quinn said.
“It’s trustees potentially engaging with digital advice platforms that will really get those things on a fast path to maturity.
“If those things can get established with a large customer list inside superannuation funds, we’ll start to see a real new capability to build standards around, as in how we will record and share data.”
