Global financial crisis an opportunity to educate clients about super

The global financial crisis is providing advisers with a great opportunity to educate their clients about the importance of an adequate super at retirement as clients become more interested in their long-term super performance, according to the director of policy and industry practice at the Association of Super Funds of Australia (ASFA), Melinda Howe.

Speaking at a breakfast session with Outlook Financial Solutions, a subsidiary of Snowball Group, Howe said that a lack of financial literacy is a barrier to Australians taking an active interest in their super, and that advice concerning super was vital for workers in the current environment.

There is a basic misconception that super is an investment, with people talking in terms of how their super performed, Howe said. They need to have a basic understanding that super is only a tax structure, and currently, most workers don’t understand the basic tax advantages that come with super.

Super also needs to become personalised for workers so they can feel empowered to take a more active role, Howe said.

Making retirement estimates available for workers every year, and making advice in super affordable and accessible to workers, would help workers become more engaged with their super, she added.