Super funds heavily reliant on general advice
General advice dominates what superannuation funds are providing to their members, according to the Australian Securities and Investments Commission’s (ASIC’s) review of financial advice provided by superannuation funds.
The methodology utilised by ASIC to survey the superannuation funds has revealed a lot about what the regulator found but also about the intentions of the superannuation funds as they move further into the advice space, with a heavy focus on robo-advice.
The ASIC methodology found that across all funds, general advice made up 75% of advice accessed by members and that the most popular advice topics sought by members were member investment choice, contributions and retirement planning.
It also found that across all funds that offer advice services to members, the most common delivery channels for providing advice to members were in-house call centres (37%) and advice providers employed by a related party (26%).
ASIC also noted that, across all funds, the key identified conflicts of interest were vertical integration, relationships with third-party advice providers, and bonuses paid to advice providers.
It also found that 61% of funds intended to increase their use of member self-directed digital advice that can generate Statements of Advice (SOAs).
Looking at advice delivery, the ASIC research also revealed that:
- 49% of general advice was provided by in-house call centres;
- 30% of intra-fund advice was provided by member-directed digital advice tools that generate SOAs; and
- 72% of comprehensive advice was provided by advice providers employed by a related party.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
