A five point plan for viable super fund advice services

Leading member fund shares critical learnings for super industry

Australian financial technology firm decimal has encouraged all superannuation fund trustees to think hard about where and how their time, effort and money is spent when expanding in-house financial advice services to members.
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Commenting on recent news that a majority of major super funds plan to expand their financial advice services over the next three years, decimal CEO Jan Kolbusz said several key areas demand the attention of fund boards and executives.
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Pointing to recent work with Canberra-based fund, AvSuper, Mr Kolbusz commended the efforts of AvSuper CEO Michelle Griffiths.
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“When looking at expanding our financial advice capability to members, AvSuper focussed on the long-term benefits for our members. This included anticipating new developments in regulations, compliance, member engagement, and technology.” Ms Griffiths said.
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“It was vital to ensure we had solid foundations in place for a rapidly developing advice environment, especially as the Government is closely monitoring super financial advice at the moment. We also need to be able to respond quickly to any changes that would further improve the service we provide to our members.
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“Our member-centric advice offer must also remain innovative and efficient in order to deliver real ongoing benefits to all AvSuper members,” she said.
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Ms Griffiths said a key factor was selecting technology that would support end-to-end functionality and encompass a number of specific business and technical requirements, including the ability to scale-up in future, a deeper engagement of fund members via the web, the efficient use of human and other capital – all while creating a seamless and watertight compliance regime.
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“On top of this, the conundrum for most super funds is that individual members have different circumstances and therefore different advice needs. So, whatever solution we chose had to be flexible enough to accommodate the very simple to very complex situations.”
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Mr Kolbusz, said: “As fund trustees become more intimate with the in-house advice pathway, they will find a trail littered with any number of potential outsource partners and software vendors promising great expertise in certain areas. But the reality is that most ‘solutions’ offer just one piece of a larger set of requirements and few can deliver an integrated package.”

The five point checklist

AvSuper and decimal encourage super fund decision makers to think hard about the following primary issues when implementing in-house financial advice services for members. These are deeper considerations that would follow any higher level strategy planning for a fund which has decided to add additional member services such as in-house financial advice:

1:Member centric, member specific

Every member is different, with specific and individualised needs. Financial advice – whether limited or complex – ideally begins with the end in mind. In other words, no matter what your starting point, the process you create must deliver an end-to-end solution that is also tailored to each member. This invariably requires a technology support function to ensure the whole process – from initial contact to fact finding and scenario planning, right through to delivering a compliant and technically sound SOA – is fully sound and integrated.

2: High tech or high touch?

Both. Successful advice delivery, particularly that which is scalable, must enable advisers to work with the very best technology and deliver great outcomes for members. And it must also be an efficient use of member capital, so affordability (keeping costs low) is another key success factor to consider. The variable needs of each individual needs to be accommodated. For many, their needs can be met efficiently and simply with minimal, or low touch, intervention by an adviser. For others, the reverse applies, which is why the underlying technology has to perform across the spectrum of needs.

3: Members engaged, loyal

The superannuation industry has been talking about member engagement for so long it’s no wonder members have moved on! The retention of members in a world full of superannuation choices and options is critical. Any moves by funds to offer advice must be premised on the core foundation of being able to deliver a consistent range of repeatable benefits that keep members engaged and loyal to the fund. “Engagement” then becomes “Marriage”, the nirvana for super funds.

4: Narrow, focused advice service or a broader array of options?

Just as we tell people about good financial planning “failure to plan, means planning to fail”. So, any fund setting off down the advice pathway is only taking the first step. Thinking hard about where you want to end up before taking that step is the critical point. Decisions taken today about the future of financial advice for the fund will need to take into account the range of options down the track – will we scale up or down? Will we offer limited advice? Will we become the central financial ‘hub’ in our members’ lives and what critical steps are needed to get us there?

5: The right technology for our time

We live in a technology-laden age. Australians are among the most willing buyers of technology in the Western world. For many, the idea of transacting, seeking information, communicating and engaging online is an automatic and accepted notion. Superannuation lives in a fluid, post-Cooper, post-GFC, post-Ripoll world. So what happens when these worlds collide? That’s the challenge ahead of the modern super fund, one that will be met by utilising the right technology at the right time with the right people in mind. Getting the foundations in place for growth with an engaged membership base, enjoying the efficient delivery of quality financial advice outcomes is the ultimate endgame.