Super choice not wanted by public
Product providers rather than consumers are driving the push for choice of funds in superannuation, according to the Goodman Fielder Superannuation Fund Secretary Peter Lambert.
Speaking at the ASFA conference in Sydney yesterday, Lambert said choice was being promoted by a number of large product manufacturers to further drive superannuation into the retail arena.
"Most of the feedback I have received has been prefaced with comments stating that 'my adviser says I should have my own fund'," Lambert says.
"This will allow the retail end of the market to cross-sell from superannuation into other products and make a profit at the same time."
Lambert says those unhappy with existing corporate funds tend to favour a move to retail funds, but if a corporate fund is meeting the needs of members this should not be an issue.
"The move to choice is really the move to retail super but a not for profit fund will still hold members if they can continue to show value."
Larger corporate fund will continue to be offered, says Lambert, but the need to do so out of loyalty and duty to employees from employers is gone.
"There is still the need to ensure support of employee members through access to services and push the advantages of a fund which is being offered by a trusted provider," Lambert says.
"The older existing members of funds know this already but it needs to be promoted to get new members."
Lambert says choice is conceptually sound even though it has been delayed but says there are pitfalls which have held it up.
"In the UK funds under litigation are more than $35 billion after the introduction of choice as debate rages over the best way to invest those funds," Lambert says.
"The move to choice should be an evolutionary step, not a revolutionary concept."
AUTHOR
Jason Spits
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