Advice services in the not-for-profit super fund sector are expected to grow, thanks to their conflict-free and simple advice structures, a new survey suggests.
The survey – conducted by Industry Super Australia and the Australian Institute of Superannuation Trustees – found that more not-for-profit super funds are providing small scale, affordable advice to members with no commission to financial advisers.
The survey predicts advice services in this sector are likely to grow by 43 per cent over the next four years.
"The key difference between financial advice services in the not-for-profit sector compared to the retail banking sector is that it is not about selling products," said ISA deputy chief executive Robbie Campo.
"In the all-profits-to-members sector, the purpose of financial advice is to improve the retirement outcomes for members by always acting in their best interests.
"Combined with the outperformance of industry super funds in the last year, the results of this survey further demonstrate the value of the all-profits-to-members model of superannuation fund governance."
Not-for-profit super funds delivered 130,451 pieces of financial advice to their members during 2013-14, the survey found, and offered a "spectrum of advice services" in a range of ways.
The survey results indicate that the promise of FOFA is being fulfilled, Ms Campo said.
"The intention of the FOFA reforms was to deliver greater access to more simple forms of financial advice – and for that advice to be high quality and in the client's best interest," she said.
"Our members are more likely to be younger and with lower super balances. The survey shows that funds are delivering simple, scaled advice that meets the needs of many people who in the past might not have gone near a financial planner."
AIST chief executive Tom Garcia said that not-for-profit funds recognise the increasing value that affordable and accessible advice has to members.
"Not-for-profit funds are working hard to make sure that members have access to affordable financial advice," he said.
"The 19 funds we surveyed ran almost 18,000 workplace seminars and 16,000 general seminars and webinars in the last year alone."
Mr Garcia said the survey also showed that funds are increasingly tailoring advice to their membership demographics.
"The average age of members receiving advice was as low as 42 and as high as 60 depending on the fund. Members are most commonly looking for help in choosing an investment option or help with transitioning to retirement," he said.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 19 Nov 2018ClearView launches dealer services offerBy Adrian Flores
- 19 Nov 2018Lonsec introduces super research to advisersBy Sarah Simpkins
- 19 Nov 2018FASEA releases standards blueprintBy Eliot Hastie
- 16 Nov 2018Government sets $51m to pursue misconductBy Eliot Hastie
- 16 Nov 2018The financial advisers most people don’t read aboutBy James Mitchell
- 16 Nov 2018Clients expect advisers to understand their situationBy Eliot Hastie
- view all