19 Jul 2017
Article first published in SuperFunds magazine in July 2017.
While robo advice has been garnering a great deal of media attention, some super funds are seeing increasing numbers of members prefer a face-to-face advice experience. Jack McCartney reports.
Financial advice within superannuation is coming of age, with super fund providers increasingly offering sophisticated holistic advice to cater, not just for their super necessities, but for their members’ entire wealth management needs. It’s an exciting period of change for the industry as more and more members turn first to their super fund for advice.
As demand rises, there is no doubt that the use of digital and robo-advice offerings are increasing, and as such, many super funds are investing in software to broaden their advice offering and remain competitive.
Like many other super funds, UniSuper has invested in digital capabilities to broaden its advice service touchpoints. While these initiatives have seen great success, interestingly it is demand for face-to-face contact with the fund’s advisers that continues to grow as the preferred approach among members.
In fact among UniSuper members, 38 per cent have indicated a preference to receive advice face-to-face, instead of phone or digital alternatives. Compared to the industry standard of 19 per cent—as reported in Investment Trends’ 2016 Financial Advice Report—these findings are a key driver behind building and refining our advice offering with a strong focus on face-to-face. At UniSuper, we expect this preference for face-to-face advice to only increase.
It’s quite significant to see initial advice appointments up 20 per cent year-on-year, with more than half now occurring face-to-face. Year to date, UniSuper has seen an increase of 25–30 per cent in the fund’s holistic Comprehensive Advice service, 48 per cent in Scaled Advice which covers super strategies, insurances, account-based pension decisions and other investments, and 143 per cent in Review Advice, where an adviser reviews an existing financial advice strategy. Enquiries have flooded through as members prepare for the upcoming changes to the super, pension and aged care systems on 1 July.
Getting the balance right
Investment Trends reports that around half of all adults in Australia have unmet advice needs, with many lacking the knowledge, time or confidence to seek financial advice. Building a relationship with a financial adviser can quickly help to overcome those barriers, encouraging people to become more invested in their financial decisions.
Phone based and digital scaled advice have a place, particularly for basic enquiries, initial contact or time-poor members who may prefer interacting online over an hour-long adviser meeting. For members with more complex needs or who are approaching retirement, there is a clear preference for face-to-face help from a trusted financial adviser.
UniSuper has witnessed growing demand for advice among younger members, with the initial face-to-face meeting helping to build deeper engagement to grow and evolve the member’s financial plan as their situation changes. In fact, 19 per cent of UniSuper members aged between 18 and 29 had a preference to receive face-to-face advice1 .
Beyond super – a holistic approach
As the needs of members continue to evolve, so too has the financial planning industry, which has moved beyond simple investment and super advice to service more complex client needs.
Super fund members are increasingly seeking a comprehensive assessment of their financial circumstances, which encompasses everything from budgeting to taxation advice, model investment portfolios, estate planning, pension entitlements, and selecting the right type of aged care. All of these are complex areas of advice which require input from an expert in their field.
As everyone’s financial goals are different, meeting with a financial adviser also gives the member the benefit of having someone who understands their short, medium and long-term goals. A trusted adviser can work with a member over many years, refining and updating the financial plan as their circumstances change to ensure they are on track to achieve their objectives.
Many super funds are beginning to offer these services in-house, recognising that a holistic approach provides a better member experience, as well as deepening the adviser-member relationship and improving fund retention rates.
Importantly, there is a clear and strong correlation between providing quality in-house advice and member retention. And while robo and digital capabilities are an important aspect in a holistic offering, nailing the face-to-face aspect is the key to success.
Jack McCartney is executive manager advice and employer relationships at UniSuper.
1 "Investment Trends July 2016 Financial Advice Report"