Cbus’ $990 retirement advice underpinned by intrafund

Cbus believes it will be able to provide one-off scoped retirement advice for under four figures with its new advice offering that bridges the gap between intrafund and holistic external advice, which will be underpinned by the collective charging mechanism of the former. 

The profit-for-member fund will launch Advice Essentials Plus, an enhanced version of its intrafund offering, for a $990 fee that aims to seek the middle ground between intrafund and external referrals. 

Cbus will now offer three levels of advice: intrafund offering Advice Essentials; Advice Essentials Plus; and comprehensive advice through external advisers. 

The fund’s retirement advice senior manager Kristin Bishop tells Professional Planner the scoped advice will still have several limitations. 

While it will be available to spouses of members outside the fund, those spouses will not be able to receive product-specific advice. 

Advice Essentials Plus will be one-off advice and only available to members who are over 60. 

“The reason we introduced it was to fill an immediate unmet advice gap as our members approachand enter retirement but for those who intrafund wasn’t enough [or] full comprehensive was the right solution,” Bishop says. 

The fund says the driver of the new service was survey feedback from members who felt the cost of holistic advice from an external adviser was too expensive. 

But the new advice service comes ahead of any regulatory certainty that could be offered by the Delivering Better Financial Outcomes reforms, as well as regulatory and governance issues currently faced by the fund.

While the $990 is much cheaper than the average adviser fee – the latest Adviser Ratings Advice Landscape Report found the average annual fee was $4300 – Cbus’ price brings it closer in line to the $800 figure Australians are willing to pay for retirement advice, according to research from Investment Trends. 

Similarly, the Advice Landscape Report found consumers are willing to pay an average of $911 for receiving advice from a financial adviser. 

“We’ve tightly scoped it to keep the cost as affordable as we can to the fund, we are also providing intrafund advice as part of it, so there is a portion of the cost of this advice which is able to be collectively charged so that’s how we’ve done it,” Bishop says. 

“We’ve got that really well-defined already because we already do that under [intrafund advice] and we can very clearly delineate what is intrafund and what isn’t, and what isn’t needs to be recovered and therefore the $990 fee.” 

The one-off offer means there’s no ongoing component, client reviews or forming multi-year partnerships.  

“That’s the biggest differentiator, the other is that we won’t do product replacement advice,” Bishop says.  

“Where it’s a non-member, we would give them the strategies, but we wouldn’t say what products to implement them with or we wouldn’t get specific with them, that’s the other big differentiator.” 

The fund created a new role called “retirement adviser” for the purpose of the new offering. “They do not have the intrafund limitation on the FAR that our superannuation advisers do have,” Bishop says. 

The fund’s existing triage/referral process to external advisers will remain the same. 

“At the first interaction where they’re dealing with one of the general advice reps in our advice team, they make an initial assessment of which avenue is likely best, but the retirement adviser will actually make a second assessment,” Bishop says.  

Bishop says the fund will still refer out where the needs of the member are beyond the scope of the advice that is offered. 

“Scoping needs to be done by the clients, so we just make it clear what their options are and let them choose the right level for themselves, understanding anything they might not get if they choose a lower or more scope option.” 

As part of the initial roll out, face to face consultations will be available at the fund’s Melbourne office, but outside of the Victorian capital members will have to rely on online meetings. 

Cbus will look to expand face to face consultations through all its offices around the country from next year as the service evolves, as well as potentially taking advisers out to regional areas for in person meetings.