Industry funds benefit from employer advice
New research has found that most Australians who switch to industry superannuation funds do not get any independent financial advice, with many recieving information from their employer.
According to the Roy Morgan Single Source survey, which included interviews with more than 100,00 people with superannuation over the past three years, customers who switch to an industry fund were the least likely to get advice.
Of those switching to an industry fund, 37.2 per cent did not get any advice, and only 15.8 per cent got professional advice from a planner/adviser or accountant. The main source of advice for this group was the employer (29.6 per cent).
Professional advisers played a much greater role for those switching to a retail fund, advising 42 per cent; however, a significant one in four (25.1 per cent) still did not receive any advice.
Employers were a source of advice for only 13.5 per cent, only slightly ahead of family and friends (9.8 per cent).
The survey also revealed that the negative image of financial planners was acting as a potential "barrier" to seeking financial advice when it came to Australians who want to switch super products.
Roy Morgan found that 31 per cent of Australians who switched super products did not seek any form of advice.
The survey also found that 18.2 per cent sought advice from their employer, while 11.8 per cent sought advice from a friend or family members.
"Issues relating to conflict of interest and professional qualifications of planners are likely to take some time to improve, but the industry is taking measures to address perceptions in these areas," said Norman Morris, industry communications director for Roy Morgan Research.
"Given the complex nature of superannuation, the lack of consumer engagement, poor understanding and low confidence in the system, it is vital that more people get advice when making decisions about switching their fund.
"With over $35 billion in superannuation being switched every year, this represents a major opportunity for the industry. The challenge is to ensure that people switching their superannuation realise they'd generally be better off getting advice, and that they can feel confident in their adviser," Mr Morris said.
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