Super fund member numbers, balances on the rise

The number of superannuation fund members is predicted to increase by 30 per cent to 4.8 million in the next 15 years, according to Russell Investments director of superannuation Steve Schubert.

Schubert said the key age group to target for advice in the next 15 years will be 50 to 64 year olds, a group that will grow by 50 per cent during this period to 8.8 million people.

“The average superannuation balance for this group will double in the next 15 years to $300,000,” Schubert said at the fund manager’s conference in Melbourne.

But the real question will be how to deliver advice to this group, as there will probably not be enough advisers to meet the demand, he said.

“We will have to make the advice model more effective,” he said.

Schubert said workplace engagement was an efficient way of delivering tiered advice and this will give corporate funds, master trusts and some industry funds a competitive advantage.

Another way of delivering advice will be electronically using modelling as well as data feeds.

“Another option is embedded advice in retirement products,” he said.

“Multi-manager products will include manager selection, portfolio construction and risk management in the one product.”

Schubert also sees future growth in pension products to meet the demand of this growing segment of the retirement market.

“What are these people going to do with their money?” he asked.

“We do need some resource that will help people work out a personal plan to manage this money.”