Bad publicity deters super switchers from advice
Bad publicity and the negative image clouding planners have deterred superannuation fund switchers from getting professional advice, with only 31 per cent seeking advice, the Roy Morgan Single Source survey reveals.
In the three years to November 2015, the average amount of super switched per year was over $35 billion, with 3.2 per cent of super products switched annually.
Despite the significant amount of money involved, just over one quarter (26.9 per cent) of those switching super over the last three years got advice from a financial adviser/planner, while 18.2 per cent sought advice from their employer and 11.8 per cent were advised by family or friends.
Industry communications director, Norman Morris, said it was essential for members to get advice when switching funds because of the complexity of super, and the lack of consumer engagement and understanding in the system.
"Issues relating to conflict of interest and professional qualifications of planners are likely to take some time to improve but the industry is taking measures to address perceptions in these areas.
"The challenge is to ensure that people switching their superannuation realise they'd generally be better off getting advice, and that they can feel confident in their adviser," he said.
Of those switching to an industry fund, 37.2 per cent did not get any advice while 15.8 per cent got professional advice from a planner or accountant.
However, members switching to a retail fund were more willing to go to an adviser, with 42 per cent seeking advice. But more than a quarter (25.1 per cent) still did not receive any advice.
Three quarters of those establishing a self-managed superannuation fund (75.9 per cent) got professional advice, while one in six said they received no advice.
The average super balance of those receiving advice was $233,000, compared to $109,000 for those who received no advice and $96,000 for those who got advice from their employer.
AUTHOR
Malavika Santhebennur
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
