Super chief values advice

The chief operating officer of one of Australia’s largest superannuation funds has told a Queensland conference that financial advice is not being appropriately valued.

The COO of REST, Paul Sayer, told the Marcus Evans Pensions and Investments Summit that one of the reasons advice was not being appropriately valued was that there was a “free advice” expectation.

He said this “free advice” expectation was due, in part, to the manner in which commissions-based arrangements had been used in the past.

Sayer said that while REST had outsourced the provision of full service financial advice to an outside financial planning group, the arrangement was entirely fee for service and that, in the interim, the superannuation fund had attempted a number of other strategies to educate and advise its members.

He said that surveys of REST’s membership had revealed that personal advice was needed, and pointed to recent research produced by the Financial Planning Association that suggests people who have received financial advice achieved peace of mind.

However, Sayer said that full service advice was inappropriate for a large number of REST members in circumstances where the average age of members is 25 and the average account balance is around $8,500.

“We also believe, along with many other people in the industry, that the cost of advice is too high,” he said.

Sayer said that members were receiving plenty of information from their superannuation funds and other sources, but the challenge was making sure they understood the information they received.

He said one of the keys in getting people to understand and to accept the information provided by superannuation funds was to identify the moments when that information was most needed and the recipients most wanted to understand it.