How can you help clients take control of their super?

Recent research by ING DIRECT and the Financial Services Council into Australians’ views on superannuation has revealed an encouraging trend: Australians are increasingly taking control of their retirement planning. ING DIRECT’s Head of Third Party Distribution, Mark Woolnough, reports.

According to Your Super Future (2015), the appetite for switching has almost doubled in recent years, while consolidation is also on the rise.

But in the face of this desire for more control, challenges remain. Australians are calling for greater transparency with superannuation, particularly around fees, and half are concerned about their super’s ability to provide enough in retirement.

While there is still plenty of room for the industry to make super more consumer-friendly, the status quo opens up tremendous opportunities for financial planners to add value for their customers:

1. Introduce super early in the planning process

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Retirement is often viewed by the younger generation as something to worry about ‘later in life’ but taking control early could reap greater financial rewards down the line.  

Consider highlighting the importance of retirement planning even when it’s not on your clients’ radar – when they’re focused on saving for a property, for example (this is often when young people first consider financial advice).  

Even if you’re just raising awareness in the first instance, planting that seed early on may help increase engagement with superannuation at a later date.

2. Build confidence in super

Around 8 in ten Australians (81%) believe super is essential in providing a comfortable retirement – a good foundation upon which to build.  But while more than half feel in control of their super, over 1 in 3 still do not.

Fees in particular can make a huge difference to your super balance, and therefore retirement lifestyle. Spending time educating clients in a simple and jargon free manner, particularly around the simple things they can do to take control of their super – such as choosing a low fee fund which offers value for money; consolidating their super into that one fund; and keeping close to their balance – can go a long way in bridging the knowledge gap.   

3. Tailor your approach

Everyone’s situation, needs, expectations and aspirations are different; so tailor your service and style accordingly.

According to Your Super Future, 46% of Australians consider $500,000 or less to be enough to see them through retirement, while 39% feel they will need to have accumulated more than $1million by the time they leave the workforce.  So, crunch the numbers with your clients, or introduce them to the myriad online tools and calculators which may help them clarify how much they may need.

Guide your customers in choosing a product which best suits their approach to personal finance management –a balanced super fund may suit those who prefer less day to day involvement, while DIY style investing may be an attractive option for those who prefer to be more hands-on.

This increasing consumer engagement with superannuation is a step in the right direction; so leverage your clients’ appetite for control and work with them to enhance their long term financial wellbeing.

The information is general in nature and does not constitute financial advice. It does not take into account objectives, financial situation or needs and you should consider whether it is appropriate. ING DIRECT is a division of ING Bank (Australia) Limited ABN 24 000 893 292 AFSL 229823, Australian Credit Licence 229823.