Superannuation fund members baulk at financial advice costs

Superannuation fund members are generally unwilling to pay extra for financial advice provided over the phone, over the internet or via a mobile device, according to research contained in a submission filed with the Parliamentary Joint Committee (PJC) reviewing the Government's Future of Financial Advice (FOFA) legislation.

The research, conducted by Mercer and cited by the Association of Superannuation Funds of Australia (ASFA) in its submission to the PJC, suggested that 40 per cent of superannuation fund members would contact their superannuation fund if they needed financial advice.

However the submission also included the results of research conducted for ASFA by actuarial consultancy Rice Warner, which suggested the cost per fund member of fiancial advice delivered through call centres, and advice delivered by a financial planner that is paid for directly by the fund rather than by the member, was relatively low.

"The average cost per member per year for call centre activities is $11.23, with average cost of financial planning $2.99," the submission said. "The average cost per call received is $17.00."

The submission noted, however, that there was a reasonably wide variation across each of the expenses. Significant contributors to that variation included differences between funds in the level and quality of service, particularly in respect of member contact centre services, and the incidence of members taking advantage of different services.

"The cost of operating call centres ranged from a low of $4.47 a year per member to a maximum of $21.16 per member," it said. "Expenditure on financial planning services varied from $0.65 a year per member to $26.25."