Financial planning ties critical for corporate super
Corporate superannuation funds have been warned that they need to upgrade their member education and build better relationships with financial planners or face membership declines of up to 60 per cent.
The managing director of consulting group, the Heron Partnership, Chris Butler said that unless the corporate funds undertook such measures they faced a slow leak of members as they opted for alternatives.
“Although the proportion of members opting out of corporate funds is quite low, at around 4 or 5 per cent, the bigger issue impacting on them is asset growth as new employees opt not to join their employer’s default fund,” Butler said.
He said research undertaken by Heron suggested that as many as 30 per cent of employees are opting to stick with their existing superannuation product rather than move to an employer’s default option.
“On that basis, in 10 years the membership of employer default funds will be about 50 to 60 per cent of what it is today,” Butler said.
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