The service outage from the $93 billion industry fund HESTA has been criticised by advisers who can’t perform their job for clients.
On 19 April, HESTA began a limited-service period of six weeks to transfer its administration from the troubled MUFG to the relatively new Grow Inc, reported at the time by Investment Magazine, sister publication of Professional Planner.
During this period, the fund won’t process super contributions, insurance claims, withdrawals or investment switches.
Rising Tide Financial Services managing director Matt Hale tells Professional Planner his practice is trying to deal with the super fund to get information for a prospective client and having difficulties accessing the relevant information.
“How can we know our prospective client and start to provide for them if we can’t get information on their second largest asset, which is their super fund,” Hale says.
“We then have to say [to the client], we can’t actually do our job until this information comes and so therefore there’s an opportunity cost for the client because we can’t provide advice.”
HESTA denied that advisers could not access client information and said advisers seeking urgent account information could contact a dedicated adviser inbox (advisersupport@hesta.com.au) where the fund said it would provide support within 24 hours.
“We appreciate the patience of advisers during this planned limited-service period, while we complete the transition to our new administration service provider,” a spokesperson for HESTA says.
The HESTA Adviser Online platform has closed during the administration transition, with the new adviser portal opening on Monday 2 June.
Under the frequently asked questions on the admin changes page of HESTA’s website, advisers are directed to contact the advice relationships team for information about the transition.
Hale says if a bank were to go offline all of a sudden, it would cause widespread panic and shock. If this would be unthinkable for a bank, why is it an option for a super fund, he questions.
“I don’t even know how you compare the double standard, but the fact that it’s acceptable [and] signed off…honestly blows me away.”
Hale also expresses frustration that advisers are regulated so intensely but super funds with millions of members are not being compliant.
“For me, it reeks of inconsistency,” Hale says.
“Financial planners have to adhere to a certain level of compliance, yet the providers that are supposed to put members first are not held to account.”
Bad timing
Link Wealth managing director Stephen Sloane says while members understand systems must be modernised, the timing and length of the service blackout is frustrating particularly with it being close to the end of the financial year.
“A blackout of this length, with limited access to funds, raises questions about planning and execution,” Sloane says.
“It also highlights a broader issue for the industry, the back-end tech that powers superannuation funds needs to be just as reliable as the investment strategy itself.”
HESTA’s minimal communication prior to its limited-service period beginning caught many members and advisers off guard, as although the fund did publish the information in February, it did not reach all members.
“Some didn’t realise there would be a disruption and have found themselves unable to access additional payments or facing delays,” Sloane says.
“When members go to access their money and find they can’t, that’s a serious problem, especially for people relying on their super for day-to-day living expenses.”
‘Lucky that no one cares’
Hale says HESTA should count themselves “lucky” that most of their members are not hugely engaged with their fund in the way they would be with their bank.
“In general, these super funds are pretty fortunate that a lot of people are very apathetic or at least very patient,” Hale says.
He says this means it is unlikely there will be a significant number of exits by HESTA members because many of them are not overly informed.
Sloane says members will want to know their money is “safe, accessible and supported by strong systems”.
“If a fund doesn’t communicate clearly or can’t keep its platform running smoothly, members may start to look elsewhere.”
Editor’s note (updated 26 May 2025): HESTA says the processing of transactions restarted last week after being in halted in February, and the fund contacted 2000 advisers in advance of the blackout.
