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Planning could avoid super ‘perfect storm’

An industry super fund has listed financial planning as one of the tools that could help Australia avoid a ‘perfect storm’ caused by a lack of super contributions.

Club Plus Super head of marketing Stefan Strano said financial advice “can be beneficial” because it can break down some of the complexities and the uncertainties relating to superannuation.

“Financial planning helps people understand how super works and what their options are,” he said. “It supports them through their working life into retirement.”

It can also help ensure people have all the right products and that they understand their options, he added.

The comments follow research conducted by Club Plus Super which indicates that Australians need to start reacting to their superannuation earlier than they are.

The independent survey of 843 fund members showed that while 51.6 per cent of respondents understood how much money they will need at retirement age, only 32.1 per cent said that they are making extra super contributions to their super fund.

“It is clear from this research that the super industry needs to continue to work at educating and incentivising Australians to adequately plan for their retirement – otherwise we risk making this [perfect] storm unnecessarily severe,” said chief executive officer of Club Plus Super, Paul Cahill.

In addition, the research showed that of the respondents not certain that superannuation was a good area to invest, more than three in five cited financial markets (62.8 per cent) and the global environment (59.3 per cent) as central reasons.

“People need certainty regarding products, they don’t like not knowing what their return will be from their super. The effects of the GFC still resonate,” Strano said.