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.

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Principal Real Estate Investors, the fourth largest institutional real estate manager in the United States, is among the greenest commercial real estate companies in the United States, according to Commercial Property Executive. The real estate publication’s annual ranking puts Principal Real Estate Investors in a class of companies forging the path for a sustainable future.

“It’s an honour to be recognised for our efforts in creating and implementing industry-leading green initiatives,” said Patrick Halter, chief executive officer of Principal Real Estate Investors. “We’ll continue to set the pace for institutional investors by optimizing building performance and reducing energy consumption.”

In 2010, Principal Real Estate Investors solidified a reputation for sustainable investment and property management with the Ten Pillars of Peak Performance, a program establishing environmental sustainability guidelines for property managers and joint venture partners that focuses on optimizing building performance and reducing energy consumption. More than 90 percent of the office buildings under management have completed some type of green building project, upgrade or improvement. This effort is projected to save approximately $12 million over the next eight years with minimal capital expenditures. The company’s focus on green initiatives has yielded impressive results:

• 3 percent reduction in energy consumption resulting in $1.2 million of savings.
• 24 buildings (more than 6.2 million square feet and $1.2 billion in value) are Leadership in Energy and Environmental Design (LEED®) certified, with an additional 68 buildings currently registered with the United States Green Building Council (USGBC) for LEED certification.
• Nearly 50 percent of the office buildings under management received the 2010 ENERGY STAR® designation and rank in the top 18 percent in the nation in building efficiency with an 82 overall ENERGY STAR rating.
• A company-wide commitment as an ENERGY STAR Partner to measure, track and improve energy performance.
• Becoming a signatory for the United Nations-backed Principles for Responsible Property Investment (RPI).

In 2009, Principal Real Estate Investors launched the Principal Green Property Fund I, LP, which is one of the first institutional commercial real estate funds to focus on investing in green properties. Additionally, the company’s core plus commingled fund ranked first among U.S. private property funds and sixth among global private property funds for corporate environmental policies and management2.

“Environmentally conscious building decisions offer investors a long-term competitive advantage over similar properties utilizing conventional practices and makes good business sense” said Halter. “The movement toward sustainable — or green — building practices is a structural change in the commercial real estate market, and we are committed to sustainable building practices throughout our portfolio.”

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