Only two per cent of superannuation fund members use a financial adviser, according to a joint report by Vanguard and Sunsuper.
The inaugural report drew on the transaction and investment experience of over one million Sunsuper members over five financial years to 30 June 2016 and found that only a small proportion of members utilised the advice services offered.
The report found that 14 per cent of Sunsuper members in receipt of retirement incomes were advised, compared to 10 per cent across the market, and nearly two per cent of Sunsuper members used an external adviser.
“While the current percentage of members in the pension product is one per cent, the percentage of members aged 50 and over is 21 per cent and we therefore expect to see strong growth in both the number of pensioners and the proportion of advised members as this cohort moves closer to retirement,” the report said.
In terms of investor types, the percentage of diversified balanced members that access advice stood at six per cent, followed by self-directed members at four per cent, and lifecycle at one per cent.
However, the report noted that lifecycle and single diversified balance option members were generally benefitting from the structure of their option relating to their asset allocation and portfolio rebalancing needs.
“What the data shows is that successful long-term outcomes for the majority of members are more likely to be driven by carefully designed default and diversified options,” it said.
Vanguard’s senior manager for superannuation policy, and co-author of the report, Paul Murphy said: “Comparing the outcomes across these three distinct investor types sends a strong message about the important role that professionally managed, well diversified default products and choice architecture play in the superannuation system”.
Murphy said that default settings and member inertia were key drivers of the Australian super system.
