Noting that advised members of industry funds routinely move their superannuation into different products, the research and consulting firm said industry funds are facing an “existential crisis” in providing their members with personal financial advice without changing their already established brand.
Previously, industry funds have been limited in their capacity as meeting the advice needs of their member bases has been untenable, NMG said.
“Even if the growth rate of advisers servicing industry fund members were to double from today, by 2020, one such adviser would still be expected to cover some 2,000 pre-retirement and pension members per year,” NMG said.
“Efforts by funds to offer this service so far have had mixed success as boards debate whether to insource or outsource the function, how to charge members and how to avoid even the slightest association with vertical integration.”
However, NMG said that through offering digital advice services, industry funds would be able to build a pipeline of members seeking advice and allow those funds to potentially “establish themselves as the natural provider” of those services.
“Digital advice is the game changer. It can help funds get a head start on the conversation,” the firm said.
“The benefits to the fund are many – member engagement and satisfaction to name a few – but possibly most importantly, should members seek face-to-face holistic advice later in life, the fund has a fighting chance of being the first provider they turn to.”
Did they think about looking at WHY advised clients don’t stay with the Industry Super Fund?
Or what a client is seeking from advice ?
How are the above comments about the member engagement topic of the above article snippet?
HAHAHAHA they have spent year stating they don’t pay fees to “dodgy” financial planners. They have devalued advice for a generation. All the while being less than transparent on their group claim statistics and asset valuation methods. Chickens coming home to roost.
Why would their members go and see a financial planner when they’ve spent years and years bashing financial planners?
And how could any respectable financial planner recommend a Union Super Fund anyway? Possibly on the investment side, but never on the insurance offer in almost all of these funds. The group insurance offers are rubbish in most part, and more importantly the client has no control on the cover. How you could ever recommend insurance via a Union Super Fund and still meet BID is beyond me.
Agree John, how does one maintain a best interests when the adviser is following the orders of the product provider…
Based on the above figures, means existing ISA planners supposedly service 4000 members each (likely more). Tell me how exactly that possibly meets Best Interests obligations, or Know Your Client or any semblance of professional obligations? It doesn’t because Labor and their cronies at ASIC(k joke) did a ‘carve out’ that precluded them from having to do any of this, or be transparent, or really give a flying flock about any real laws or rules that we have to abide by (and now can get jailed for up to 5 years for). Damn right I remain effing cranky.
Financial advice involves human interaction. Good luck trying to replicate that via robots or digital platforms. The reality is that despite all the mud slinging the industry funds throw at the advice industry their lack of quality advice professionals is their achiles heal. And not sure that having a panel of external advisers is the answer ie we will refer you clients providing you keep them in our fund – both hypocritical and a questionable role for a professional adviser to sell their sole ?