Financial advice is the oil that greases the engine of superannuation and funds have to be transparent about the cost, according to a leading industry superannuation fund chief executive.
ClubPlus chief executive, Paul Cahill, has told a roundtable undertaken by Money Management’s sister publication Super Review that he believes advice is paramount to serving the interests of both members and the fund.
“It’s advice. Advice is the oil that greases the engine. The rest of it’s all academic,” he said.
In doing so, Cahill pointed to the fact that his fund had its own advice business within which it charged member $880 for a plan, and he said this cost was made clear to the member and not obscured by any broader fees structures.
He acknowledged that some industry funds might fund advice on a different basis but said that his fund was “lily white, transparent”.
“….we’re not going to try going to the members [saying] ‘Yeah there’s one per cent down the back there that you didn’t see in the first place’,” Cahill said. “It’s not how to go.”
MTAA Super chief executive, Leeanne Turner, agreed with Turner on the importance of advice but said the cost could represent a barrier for those, younger members who did not understand its value.
“It’s great for those of us who understand it [the value of advice] but I can tell you for, say, a 38 year old mechanic $880 is a lot of money,” she said.
The roundtable participants agreed that education on the value of advice was a crucial ingredient.
