Value of advice highlighted for super accounts

Responding to short-term market moves can have a detrimental effect on your super balance, as those who switched to cash last March could be up to $27,000 worse off (based on a balance of $100,000), according to SuperRatings.

Kirby Rappell, SuperRatings executive director, said: “We looked at the impact of switching out of a balanced or growth option and into cash at the start of the pandemic and found that those with a balance of $100,000 in January 2020 and who switched to cash at the end of March would now be around $22,000 to $27,000 worse off than if they had not switched”.

This effect of switching into cash as a response to market turmoil was also seen when looking at returns over the past 15 years, as a typical balanced super option balance of $100,000 in July 2006 would have accumulated to $247,557.

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Rappell said most super funds offered scaled advice for free or at a low cost, with members able to get advice on topics such as contributions, investment options, insurance in the fund and the transition to retirement.

“For members who want more tailored advice, some funds will offer comprehensive advice that will also take into account your financial assets outside of superannuation,” Rappell said.

“While there will be a cost associated with this comprehensive advice, most funds will allow the cost of the advice to be deducted from the superannuation account, just make sure you check any costs and how they can be paid before agreeing to get the advice.”

Growth in $100,000 invested over 15 years to 31 July 2021

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Just another push for intra fund advice... charge everyone only give the service to a couple people... Just charge clients fee for service if they want advice.

Instead of complaining about intra fund advice show why professional financial advice is better and more comprehensive.

How about super funds argue why they shouldn't just charge fee for service when people want advice? if financial advice is so valuable and they have such I high demand for the service... charge for it when the client wants the service like all other advisers.

No more carve outs... no more charging clients for a service they don't use.

People can get financial advice from all sorts of sources - financial advisors, accountants, lawyers, social media, newspapers and magazines, work colleagues, friends and family and from retail and industry super funds. And they do. Nothing is stopping them. Nothing is stopping people and organisations for giving advice as long as it is within legal bounds.

There's many things in life that people do not get full value for their payments and their tax payments. Some get super value.

I believe that people get best value for financial advice from independent professional qualified regulated financial advisors. But financial advisors do not have a monopoly as much as they would like.

Time to give up this fixation on intra fund advice and focus on getting people to know that the only place to go for financial advice is a professional financial advisor even if they are in an industry super fund. And the evidence is in. There's plenty of demand for financial advice from advisors. Advisors do more than just advise on superannuation - hope they do - and infra fund advice sticks to superannuation - they should do.

The profession needs to take a leaf out of the industry super fund advertising comparing beneficiaries. Let's imagine an advertisement comparing two people with the one using an advisor doing better. Hard to prove otherwise.

Hedware, you have a love for Industry Super and Intra Fund advice that much is clear, but why? I reckon Intra Fund advice is only provided to retain FUM for the product provider. The Product Provider I suspect are well aware that Intra Fund Advice is worthless, perhaps completely which is why they can't charge a member a fee only if advice is provided. Intra Fund Advice fees I suspect would be rejected by almost members if they even knew they were being charged this fee year in year out.

The fact that you support charging innocent small retail Mum and Dad working Australians a fee for no service is a reflection on the service of Intra Fund Advice - over rated and over charged.

I am completely agnostic as to whether someone has retail or industry super. It's their choice. However I do consider that retail funds should be doing much better given the fees charged which can only be regarded as excessive fees given their consistent average performance.

I do not have any professional or personal interest in industry super - rather the other way around. I may appear to support industry funds but that it because the dishing of industry funds is more about ideology than professionalism. The critics in the planning industry appear to forget there would be no superannuation of today without the Labor Party and the unions negotiating the Accord.

The retail funds prefer to give intra fund advice to advisors who may or may not pass onto their clients (if this is not happening for you then you are missing out). The industry funds prefer to deal directly with clients (and that annoys advisors). It's just two reasonable approaches to doing business - we are a capitalist economy.

If as you say intra fund advice is just designed to keep clients, then that is doing business. We all have different approaches to keeping clients - seminars with free lunches included.

If as you say intra fund advice is worthless then why are you bothered? If people are not using 'free' intra fund advice then they are unlikely to hire a financial advisor (and so you are not missing out on fees).

The financial planning advice industry did not care too much about charging innocent, small, unknowing mums and dads (even dead ones) for non existent advice before found out in the Royal Commission. Back then what did you do to complain about fees for no service? It is hypercritical to be on a white charger now.

All this energy spent on industry funds is a waste of time and energy. All focus should be on developing a professional financial advice body that offers good business and valued service.

Hedware - I feel you miss the point nearly every time this topic comes up.

Almost all of these arguments that have been made are matters concerning equity between financial advice practitioners.

Financial Advisers (Authorised Representatives) who are registered to the FAR are bound by the same fiduciary duty to clients and the FASEA same 'Code of Ethics'. That is well understood.

So you would think that advice provision would be treated and tested equally to these fundamentals...? That seems appropriate.

What many here point out quite, outcomes and adviser accountability 'arguably' appear influenced by whom your employer is rather than the actual advice you provide. That is the bit that makes people upset.

With regard to the mechanics to the charging of advice fees . There are some very sound arguments here again surrounding equity between practitioner types. Do you believe that the current system in how advice is paid for is equitable in its design?

If you believe that it is equitable, can you please then re-address the above question with regard to the ability of a member 'to opt-out' from paying advice fees.

Hedware - you say, "The financial planning advice industry did not care too much about charging innocent, small, unknowing mums and dads (even dead ones) for non existent advice before found out in the Royal Commission. Back then what did you do to complain about fees for no service? It is hypercritical to be on a white charger now."

My response to this: This is a poor comment and just poor form in general. Although there were many who have / are remediating fee for no service, it must be pointed out that are many compliant advisers in Australia who did do the right thing and their look backs have proven this. This leads me into another point of equity. Please cease tarring advisers with the same negative brush. We're sick of that as well.

Hedware, another comment from you above. "If as you say intra fund advice is just designed to keep clients, then that is doing business. We all have different approaches to keeping clients - seminars with free lunches included."

My response to this: I believe that there is an arguable distinction between keeping someone a 'client of a practice' as opposed to remaining a 'member of a product' which may not have been considered in your response.

Thank you as you raise good points. I have always been consistent in saying that there is nothing like a good professional financial advisor and I know this from both sides. As you say it is sad that the decency and expertise of financial advisors has been bought down and unfairly on most by a few. That said, people are using financial advisors and apparently in greater numbers and with the flurry of regulatory, education and professional adjustments hopefully a floor is now under the past.

I have to admit that I have never been in the position to receive intra-fund advice but I gather that it is basic advice and does not compare with the advice a financial advisor can and does provide. However I do know that intra fund advice has led people to sign up to a financial planner.

In respect to fees, there is no prescribed fee schedule and so the equity argument can be ignored. Sure there is a going rate but it depends on the individual client's capacities and maybe the relationship with his/her advisor.

I totally agree that the appropriate regulatory and ethical provisions must apply in the provision of financial advice. After all, it is the clients funds for their retirement in the case of superannuation and pension.

I stand by my comment about the cowboy days. The professional bodies badly let down individual financial advisors as well as many people by what can be regarded as their connivence with what was going on. I am sticking up for financial advisors as personally I know their value.

I acknowledge your last point and accept a distinction can be made, but that distinction would not be apparent to people outside the industry. I am all for keeping someone as a client of the practice - makes good business sense and makes for a better and longer advisor-client relationship. The true value of a financial advisor does not manifest itself at the first meeting but it does over time.

If you are a financial advisor then what does it matter to you if industry super supernatants don't use an industry super fund service? They are not your clients unless some of them have decided your service is worthwhile using. If they are not your clients then work to get them as your clients and so pay a fee for service. Simple stuff.

I'm guessing you pay insurance but you probably prefer not to have to use that service.

Hedware - why were Commissions banned?

Because financial advisors would never become a respected professional body. Commissions allowed for the carpet baggers, the incompetent, and the shonkies to operate and corrupt the reputation of honest and capable advisors. If you are still harping on about commissions, then it is time to get out.

Remind me how Intra Fund Advice works?

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