Bad publicity deters super switchers from advice
Bad publicity and the negative image clouding planners have deterred superannuation fund switchers from getting professional advice, with only 31 per cent seeking advice, the Roy Morgan Single Source survey reveals.
In the three years to November 2015, the average amount of super switched per year was over $35 billion, with 3.2 per cent of super products switched annually.
Despite the significant amount of money involved, just over one quarter (26.9 per cent) of those switching super over the last three years got advice from a financial adviser/planner, while 18.2 per cent sought advice from their employer and 11.8 per cent were advised by family or friends.
Industry communications director, Norman Morris, said it was essential for members to get advice when switching funds because of the complexity of super, and the lack of consumer engagement and understanding in the system.
"Issues relating to conflict of interest and professional qualifications of planners are likely to take some time to improve but the industry is taking measures to address perceptions in these areas.
"The challenge is to ensure that people switching their superannuation realise they'd generally be better off getting advice, and that they can feel confident in their adviser," he said.
Of those switching to an industry fund, 37.2 per cent did not get any advice while 15.8 per cent got professional advice from a planner or accountant.
However, members switching to a retail fund were more willing to go to an adviser, with 42 per cent seeking advice. But more than a quarter (25.1 per cent) still did not receive any advice.
Three quarters of those establishing a self-managed superannuation fund (75.9 per cent) got professional advice, while one in six said they received no advice.
The average super balance of those receiving advice was $233,000, compared to $109,000 for those who received no advice and $96,000 for those who got advice from their employer.
AUTHOR
Malavika Santhebennur
Recommended for you
After seven years at the company, Iress’ chief technology officer for wealth management APAC, Anthony Gerrits, has departed as the firm commences a search process to fill the role.
With advice firms thinking about scaling up in 2025, research has detailed the main avenues financial advisers say they have used for successful recruitment.
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
