In an era of continuously changing superannuation requirements, a never-ending array of financial products and a rising retirement age, professional financial advice has become more important than ever before. With this in mind, it makes sense that more and more Australians are seeking advice, not only to plan for their retirement, but make sense of the noise.
As advice needs grow and expand, it has been interesting to observe the growing role superannuation funds are playing in the provision of financial advice. Against the backdrop of rising member balances and increased engagement, individuals are turning to their superannuation fund for guidance and advice.
This shift to superannuation funds has taken place during the last few years and is rapidly picking up pace. As demand for advice grows across our sector, here are three trends we’re seeing among our members and the broader advice environment.
Financial advice is not just for retirees
Over the past 12 months we’ve seen strong demand for our scaled advice services, especially among younger members. As members reach their 40s, their balances are becoming more significant and they are increasingly engaged with their superannuation fund. While many members in this age bracket still have mortgages, and young children with costly education expenses, they are becoming more focused on planning for the future and are open to advice on finances and investing. For these members scaled advice – where an adviser looks at one or two aspects of a member’s finances – is an attractive entry point to answer specific questions or concerns. We continue to see strong demand for this type of advice, with the number of scaled advice appointments up 21 per cent year-on-year, having gained significant traction as a cost-effective and simple way to receive tailored advice.
In fact, we expect the volume of scaled advice appointments to overtake comprehensive advice appointments this year, as members in their 40s seek insight into certain aspects of their financial position.
While scaled advice is the rising star, comprehensive advice remains very popular with members looking for an in-depth financial plan, up 15 per cent year-on-year. We tend to see members move from scaled advice to comprehensive advice as they near retirement or plan for major life events.
It is exciting to see awareness and financial literacy levels rising, with members taking action earlier – it’s no longer just those nearing retirement reaching out.
Face-to-face still king
People like talking to people, especially when we are discussing financial issues and decisions that will impact them directly for the next 10, 20 and 30 years.
Whether it is scaled advice or comprehensive advice, we are increasingly seeing that members prefer sitting down with a professional adviser. At UniSuper, the number of face-to-face meetings continues to rise substantially year-on-year. More than half of UniSuper’s initial advice appointments occur face-to-face.
Digital platforms provide a portal for members to research and educate themselves. Our recently launched ‘Ask an Adviser’ is one example of this, allowing us to crowdsource commonly asked questions and debunk myths and misconceptions.
A solution like ‘Ask an Adviser’ is a good starting point to begin the advice discussion. It allows us to identify members who are seeking advice and then help them find the answers they are looking for. Once a member’s question is answered online, a financial advice consultant follows up directly with a phone call for a more extensive discussion about their query and any additional questions.
While digital advice no doubt has its place—especially for simple queries or younger members with lower balances that are starting out in their careers—our members are still very much looking for personal interaction.
For each fund, the ideal model will look different – every fund’s members have different needs. For us at UniSuper, our national model of 50 advisers is proving flexible in responding to our members’ changing preferences and needs. We are fortunate to have strong ties with our university partners and the ability to bring advice to our members’ workplaces.
This year, we will roll out several on-campus advice offices to give our members direct and simple access to our services, and opening new advice offices in places like Parramatta. Our goal is to be where our members are.
Getting the advice proposition right can be challenging, but it is vital to make the service accessible, all-inclusive and available through various channels, for members and their families at all life stages.
More than just advice on superannuation
Members want an advice experience that is broader than just their superannuation fund. For example, our extensive approved product list allows for complete advice across all aspects of wealth creation and management – including investments, insurance and retirement strategies as well as 20 other superannuation funds.
We know a vast majority of Australians have multiple superannuation funds. Providing comprehensive advice without addressing an individual’s multiple superannuation funds, as well as broader investments, is not viable. Sometimes the solution may be to consolidate your UniSuper funds into another superannuation fund – our advisers are empowered to make those recommendations. At the end of the day financial advice is about trust, and by taking a transparent and holistic approach, we are able to deliver on our promise to members.
We also have speciality taxation and estate planning expert partners on hand, as well as accredited aged care advisers, to assist members with specific queries given their unique circumstances.
It is this breadth of advice, far beyond products in the UniSuper range, which round out our offering and truly delivers on members’ best interests.
There is a clear and strong correlation between quality advice and member retention. We have found the advised member cohort to have the highest retention rate. Our data shows that approximately 90 per cent of members who seek comprehensive or scaled advice with UniSuper stay with the fund to retirement. In fact, even a member making an advice appointment, without committing to an advice service, is a strong indicator that they will remain with the fund long term. This correlation makes an advice offering—whether face-to-face, phone-based, online or a combination of the above—a must-have for all superannuation funds.
Super is one of the biggest investments of our lifetime, and with retirement adequacy becoming forefront, members are expecting more from their funds. For our advised members, it’s been reassuring to have their entire retirement and wealth management needs met under ‘one roof’.
Through advice, we can turn up the dial on member engagement, and positively influence our members’ financial standing and retirement outcomes more than ever before.