Because the majority of its clients are in defined benefit schemes, State Super Financial Services (SSFS) is deliberately organised so that its advisers are not independent of the firm, according to the managing director.
Speaking to ifa at the launch of the company's Perth office yesterday, SSFS managing director Michael Monaghan said SSFS has a vertically integrated model and and its planners are “part of the organisation”.
But he pointed out that SSFS differs from more 'independent' financial planning organisations in that 95 per cent of its clients belong to one of the four closed defined benefit schemes in State Super.
In addition, most SSFS clients are in pension phase and have relatively low account balances, which differs from the often "quite high" fees charged by some of the fee-for-service players in the industry, he said.
"If we were dealing with the same segment then we might have a different approach," he said.
In addition to advising on the State Super definined benefit schemes, SSFS has its own in-house products that cost around 65 basis points on average, he said.
But SSFS does have clients 'walk in off the street', and there is every chance that they will be advised to remain in their current superannuation fund, said Mr Monaghan.
“If they were in a good quality fund – and most funds are reasonably good quality – we would suggest that they stay there, typically,” he said.
Most of SSFS's revenue comes from comprehensive advice fees, which are charged as a percentage of assets – 75 basis points up to balances of $1 million, said Mr Monaghan.
Because a vast majority of SSFS's clients are retired, the firm is looking to embrace technology to engage with the younger generations, he said.
“Technology is going to disrupt our industry massively, and we want to participate in that – we're not going to be a victim of it,” he said.
The new Perth office currently has five planners (all recruited in from WA), and Mr Monaghan said SSFS plans to open another office in the area when the numbers hit 15 to 16.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 09:50McMaster: Where was ASIC on Beacon, CBA and AMP?By James Mitchell
- 18 Sep 2018Peter Kell resigns as deputy chair of ASICBy Eliot Hastie
- 18 Sep 2018Two former Macquarie advisers given 10-year banBy Adrian Flores
- 10:35Raiz addresses Millennial advice gap with chatbotBy Reporter
- 18 Sep 2018FASEA a ‘disaster’ destroying the industry: AIOFPBy James Mitchell
- 10:35Advisers granted statutory declaration rightsBy Adrian Flores
- view all