Consumer uncertainty a $480b opportunity for super funds
Clear communication about the benefits offered by superannuation funds' products will be key to securing a slice of a $480 billion pie, created by consumer uncertainty, research reveals.
CoreData's 2015 Post-retirement Report found that 40 per cent of pre-retirees and almost a third of post-retirees were unsure about which type of fund would provide the best offer in retirement.
The research found that while low fees were the leading offer that could help funds retain members, financial advice was also seen as an attractive feature, CoreData principal, Andrew Inwood said.
"Based on our research and ATO/APRA superannuation balance data for pre- and post-retirees, we estimate this uncertainty represents a $480bn opportunity for funds," he said.
"To claim their share of this pie, super funds must clearly communicate how their products offer the best overall retirement solution.
"Our research shows that financial advice has potential to become a stronger retention lever, perhaps easing the pressure to lower fees."
Inwood said the report uncovered an increasing demand for scaled advice among pre and post-retirees in APRA-regulated funds, with 60 per cent of respondents reporting that they would consider using a scaled advice service through their main fund.
"Our findings suggest that scaled advice may offer a more appealing gateway to financial advice services, especially among pre-retirees," he said.
"Indeed, offering scaled advice could help funds harness the power of advice to retain members — perhaps even tap the $480 billion opportunity our research has highlighted."
AUTHOR
Nicholas O'Donoghue
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