Super switchers demanding advice

10 July 2015

A growing number of members switching their superannuation are getting advice from financial planners and advisers, with fewer people going to their employer for advice, research found.

Roy Morgan research revealed the number of members going to an adviser when switching funds has gone up from 20.5 per cent in 2010 to 29.9 per cent in 2014.

The findings suggest members are pro-actively making decisions on which super fund they would like to switch to by seeking professional advice rather than falling back on default funds.

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Those with higher super balances and incomes were more likely to seek professional advice, with the median amount in super for those who sought advisers standing at $102,000, compared to a median of just $44,000 among those who do not seek advice.

People seeking advice when they switch super fund managers has gone up from 68.8 per cent in 2010 to 72 per cent in 2014, with 9.3 per cent going directly to financial institutions for advice, up from six per cent in 2010.

However, only 35.4 per cent went to a professional planner or accountant, with others relying on their employer (18.7 per cent), and friends/family (12.2 per cent).

Industry communications director, Norman Morris, said while it was heartening to see members seeking advice when switching fund managers, there were concerns around the source of advice.

"With only around a third of those who switch their superannuation getting professional advice, combined with the considerable lack of engagement and understanding by many in superannuation, it is of some concern that they may miss out on appropriate advice for their particular needs," he said.

Meanwhile people in self-managed super funds were most likely to seek advice (82.9 per cent), followed by major retail funds (72.6 per cent), and industry funds (62.7 per cent).

Only 13.2 per cent of those who moved to an industry fund sought advice.

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