Advice trumps investment management
Provision of the right advice to superannuation fund members can make a bigger difference to their retirement incomes than investment management, according to the founder of a company promoting digital advice delivery within superannuation funds.
SuperEd co-founder, Jeremy Duffield will tell this week's Association of Superannuation Funds of Australia (ASFA) conference in Brisbane that he believes it is advice, not investment alpha, which will ultimately deliver better and more sustainable retirement incomes for fund members.
"Despite this, the industry continues to be obsessed by seeking excess investment returns and spends in excess of $10 billion a year on investment management - a figure which dwarfs the meagre allocations to advice and better education for super fund members," he said.
Duffield said he would be telling this week's conference that super fund boards have the best opportunity to improve member outcomes through an increased focus on advice.
"Expanding access to advice for members can have a substantial pay-off in terms of higher sustainable retirement incomes," he said.
"Advice is critical to helping members achieve their personal retirement goals," Duffield said. "But today, even the best resourced advice teams provide only a fraction of the membership with advice in any given year. As an industry, we need to turn this around and deliver quality advice to the majority of super fund members."
Duffield said the delivery of expert advice en mass required funds to embrace technology, and that funds could not deliver advice to mass memberships without digital advice being a key component of the total offering.
The longer it takes for funds to deliver a member-centric advice solution, the more they miss the opportunity to help members optimise their retirement incomes and show they can help them with their retirement stream.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
