Online advice race gathers pace

Super funds and their service delivery agents are racing to take new intra-fund advice technology to market.

A number of technology providers, including SuperRatings, Provisio and decimal, are preparing to roll out software to allow super funds and institutions to take advantage of intra-fund advice rules online.

Decimal has a contract with Pillar, the administration company that services around four million Australians via its super fund clients. Decimal head of distribution Wes Gillett said the software would allow Pillar’s funds’ members to execute intra-fund advice autonomously.

“Members can get on and play, from intra-fund to single issue to full advice – all online,” Gillett said. How far members are allowed to go down that path will be at the super fund’s discretion.

Decimal’s software will allow super funds to reach out to members using personalised URLs that link to pages pre-populated with their personal fund information. This can be used to encourage members to take action on contribution levels, investment options or insurance.

Gillett said decimal was also trialling the software with other “large wealth companies” in the retail space.

“In some sense there’s more of an impetus [for retail funds] to engage their memberships, because they have very much a profit and cross-sell philosophy, more so than the industry funds, so they’re very interested in that campaign functionality.”

Gillett said decimal’s software is more than just “a simple calculator”.

“We’re re-engineering the whole delivery of advice process,” Gillett said.

“It’s about delivery of affordable advice for all Australians. We’re calling it the industrialisation of advice. And technology really can be the only way that advice can be industrialised in the way the Government’s wanting it to be.”

Gillett said decimal would be offering the application to dealer groups in the next quarter.

“They’ll want a broader product selection – they’re not just selling their own superannuation fund. But the issues are exactly the same: how the hell do we get advice to our low-value clients who have been cross-subsidised from our high value clients in the past?”

Super funds including AustralianSuper and Hostplus are ramping up their online advice offerings. Industry Super Network head of strategy Robbie Campo said while some of the offerings are “just very sophisticated calculators”, if the member’s circumstances are straightforward “then it’s very possible for them to be guided through to making a decision”.

Midwinter director Matthew Esler said he believed advisers should not be concerned about the move by super funds into the online intra-fund advice space, and the impact that could have on their businesses.

“Intra-fund is so basic that it can be automated, and it is automated to a large extent. But understanding the clients’ needs and objectives and providing the best recommendations is something that needs a human element. It needs the paraplanner or the financial adviser to guide them through that,” Esler said.

“We have found that the best outcomes have always been achieved where there’s been a human element. We could automate the whole system, but we’ve chosen not to do that because we’ve found that you need to have that human interaction, you need that expertise.” Esler said software advancements also continued to reduce the time – and therefore cost – of delivering complex, personal advice.