Head shrinking and super
A new opt-in superannuation contribution program combining psychology and economics research to overcome human behaviours such as apathy and procrastination has been announced by Plum.
The announcement coincides with Federal Government discussions about a possible opt-out arrangement for personal superannuation contributions. If introduced, this would boost the default contribution for new employees from 9 per cent to 12 per cent, unless the individual chooses otherwise.
Designed using behavioural finance theory from the US, Plum aims to help participating employers encourage employees to boost personal superannuation guarantee contributions to a maximum of 15 per cent of salary. In a bid to keep the process simple, only two decisions need to be made once an increased contribution rate is selected: whether it will come from pre or post-tax income, and the percentage increase in increments of 1, 2 or 3 per cent.
“It’s simple — members commit to increase their contributions, by small steps for most people, automatically each year until they reach their target contribution level, which for many people would be 12 per cent or more,” said Plum managing director Mike Fitzsimons.
The approach is based on Saving More for Tomorrow (SMarT), a program pioneered in the US by leading behavioural finance researcher Professor Shlomo Benartzi.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
