Super funds unlikely to provide advice any time soon: KPMG

Based on the expected timeline for the implementation of recommendations from the Quality of Advice Review (QAR), KPMG does not expect super funds will be able to provide advice for at least another three years.

Melinda Howes, Lisa Butler Beatty and Linda Elkins from KPMG Superannuation Advisory have identified financial advice as one of the key themes that will shape super fund discussions and decisions over the coming year.

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“How funds provide or make accessible quality advice is difficult with the current regulatory settings, concerns about the financial viability and risks of providing advice,” they said.

The KPMG experts noted that regulatory reform which may result from the QAR could assist super trustees to deliver appropriate advice into retirement.

“But we don’t expect any recommendations to be able to be implemented quickly, with a minimum three-year time frame likely,” they added.

They noted that financial advice is one factor that can help members choose a quality fund, set goals and develop contribution, insurance and investment strategies.

“Advice is also important when members move into retirement given the complex choices and specific risks that need to be considered,” the experts said.

In relation to the issue of super funds growing and maintaining members, they suggested that funds must have a clear strategy to deliver outcomes that will attract and retain members.

“Access to advice is important to many members, but advice is becoming less accessible and more expensive with a complicated regulatory framework making it difficult for funds themselves to offer advice,” said Ms Howes, Ms Butler Beatty and Ms Elkins.

Mergers, market volatility, climate risk and member acquisition are also anticipated to be dominant themes in the year ahead, along with transformation and digitisation as well as increased prudential requirements from APRA.

“2023 sees no respite from the hard work superannuation executives and trustees need to do to ensure they are providing excellent member outcomes and keeping up with member expectations,” KPMG’s experts said.

“With the growing size and importance of superannuation funds in the financial services system, regulatory reform and scrutiny will also continue at pace to ensure Australia continues to have a world-leading superannuation system.”