Simplifying advice on super funds
Comparing the benefits of various superannuation funds will be made simpler for advisers following the launch of a research resource from Mercer Investment Consulting.
The company has created Mercer >IS< Super, a service aimed at saving time and reducing compliance risk for advisers by comparing the critical features of industry, corporate, government, retail employer and retail personal superannuation funds.
“Developed by advisers, exclusively for advisers, Mercer >IS< Super captures and organises factual information on investment, insurance, fees and services, so advisers can easily customise their advice for each client,” Mercer Investment Consulting head of retail services Rashmi Mehrotra said.
According to Mehrotra, the distinguishing feature of the service is star ratings on individual investment options.
“Through Mercer >IS< Super, advisers can generate one page fund profiles on each investment option summarising the investment objective, asset allocation and underlying managers,” she said.
“It includes an indicative star rating based on a weighted average of the Mercer ratings on the underlying managers.
“Essentially, we are providing look-through ratings on all multi-manager portfolios, which include commercial multi-manager funds as well as the portfolios offered by industry funds.
“Since Mercer ratings are forward looking, advisers now have access to something additional besides past performance to assess the merits of the investment options.”
The service uses research data compiled by Mercer from public sources, such as funds’ product disclosure statements (PDS), websites, and annual reports, Mehrotra said.
Mercer’s internal teams then review the data before it is returned to the superannuation fund provider for verification.
According to Mehrotra, Mercer has already experienced strong demand from a range of dealer groups — including non-clients — interested in the service.
The initial phase of the service will include 40 superannuation funds, including 17 industry funds and 18 retail personal and retail employer funds.
This will increase to 70 or 80 funds in coming months.
According to Mehrotra, the service also assists advisers in instructing clients about particular options and terms of superannuation funds, such as continuance options.
“In these instances, it is more useful to have a factual summary of the PDS than a subjective overall rating of the super fund with no mention of these features.”
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