The Association of Superannuation Funds of Australia (ASFA) today released a new report demonstrating that intra-fund advice is provided at a relatively low cost per member per year.
The report found that the median cost for intra-fund advice equates to $2.81 per member per year, with an average per member per year cost of $9.65. The bulk of the cost of scaled advice (87 per cent) is covered by general administration fees charged to members by funds, or a combination of general administration fees and a specific fee for the service provided.
The report also found people prefer simple advice about their superannuation such as that provided by the current definition of intra-fund advice. According to research from ASIC, around one-third of fund members prefer to receive financial advice as required, as opposed to a comprehensive plan.
ASFA CEO Ms Pauline Vamos says intra-fund advice is cost effective because it is limited to the very simple end of full financial advice, and, while it does not replace full advisory services, it does enhance them.
"This report reinforces why it's important that intra-fund advice remains available to fund members. It is an important element of our superannuation system, as it enables people to access affordable advice so they can make simple decisions about their accounts.
"Allowing funds to provide scaled intra-fund advice helps to reduce and share the cost, and allows more people to access this member service. But it must be limited, and this is why we welcomed the draft FoFA [Future of Financial Advice] legislation released last month, and applauded the Government for keeping the current definition of intra-fund advice intact."
For a copy of the full research report, visit the reports section of the ASFA website.
For further information, please contact:
Lisa Chikarovski, Media Manager, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation, which aims to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.