A survey of 19 not-for-profit superannuation funds examining over 130,000 pieces of financial advice delivered to members in the past year has found that the sector is providing more small scale, affordable and simple advice to members – with no commissions to financial advisers.
The survey – conducted by Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST) – also reveals that advice services in the not-for-profit super sector are expected to grow by 43 per cent over the next four years.
Industry Super Australia said the survey indicated that the promise of the Future of Financial Advice Reforms (FoFA) was being fulfilled.
“This survey indicates that the not-for-profit sector is shaping up to be a very significant provider of financial advice, with continued growth in the provision of member-focused advice expected in the coming years,” ISA Deputy Chief Executive Robbie Campo said.
“The intention of the FoFA reforms was to deliver greater access to more simple forms of financial advice – and for that advice to be high quality and in the client’s best interest.
“Our members are more likely to be younger and with lower super balances. The survey shows that funds are delivering simple, scaled advice that meets the needs of many people who in the past might not have gone near a financial planner,” Ms Campo said.
The survey reveals that not-for-profit super funds delivered 130,451 pieces of financial advice to their members during 2013/14. It found that the not-for-profit superannuation sector offered a spectrum of advice services – piece-by-piece advice, intra-fund advice, personalised advice and holistic advice – delivered in a range of ways including online, telephone and face-to-face.
“The key difference between financial advice services in the not-for-profit sector compared to the retail banking sector is that it is not about selling products. In the all-profits-to-members sector, the purpose of financial advice is to improve the retirement outcomes for members by always acting in their best interests.
“Combined with the outperformance of industry super funds in the last year, the results of this survey further demonstrate the value of the all-profits-to-members model of superannuation fund governance.”
AIST CEO Tom Garcia said that not-for-profit funds recognise the increasing value affordable, accessible advice has to members.
“Not-for-profit funds are working hard to make sure that members have access to affordable financial advice,” said Mr Garcia. “The 19 funds we surveyed ran almost 18,000 workplace seminars and 16,000 general seminars and webinars in the last year alone.”
Mr Garcia said the survey also showed that funds are increasingly tailoring advice to their membership demographics.
“The average age of members receiving advice was as low as 42 and as high as 60 depending on the fund,” said Mr Garcia. “Members are most commonly looking for help in choosing an investment option or help with transitioning to retirement,” he said.
Source: Australian Institute of Superannuation Trustees/Industry Super Australia
