Advice key to super survival
Advice will be the linchpin upon which superannuation funds will succeed or fail, according to a new white paper published by specialist research consultancy, Milliman.
The Milliman white paper also argued that if industry funds wanted to increase their distribution via the advice channel, it would lead to higher costs that might need to be passed through to members.
The white paper, which examines the evolution of the superannuation industry in the context of the Cooper Review and other Government inquiries, argued that without the ability to engage members no amount of improved products or strategies would help.
It said the breadth of member needs and the focus on individual circumstances would necessitate a customised response to adequately deal with retirement issues and meet a fund’s duty of care to members.
The white paper also argued that looking at the ongoing fee debate between the retail and not-for-profit sectors, the simple fact was that retail funds had substantial distribution capabilities.
“Funds will need to develop their own distribution approaches if they intend competing in this space,” it said. “This will inevitability lead to increased costs, which will need to be balanced against the long-term benefits of member retention.”
AUTHOR
Mike Taylor
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