Super sector’s advice approval a signal to invest in technology and staff, says UniSuper

UniSuper said the federal government’s announcement in response to the Quality of Advice Review would give it the confidence to step up its investment in staff and technology.

UniSuper head of financial advice Andrew Gregory.

The $115bn UniSuper plans to step up its role providing financial advice for its members following the federal government’s announcement of plans to allow super funds a greater role in the sector.

“We see incredible value in the financial advice we can provide to our members and will be doubling down on our advice,” UniSuper head of financial advice Andrew Gregory said.

“Superannuation funds have built up a strong level of trust with their members.

“They have an important role to play in society in providing advice and guidance to their members.”

Mr Gregory said the government’s announcement in response to the Quality of Advice Review would give UniSuper the confidence to step up its investment in staff and technology around the provision of financial advice.

UniSuper, which has its roots in the university and education sector, is now an open-offer super fund with more than 600,000 members.

Mr Gregory said the government’s announcement was timely given that some 3.6 million Australians would be moving into retirement over the next 10 years.

One in six UniSuper members are set to retire over the next 10 years and 20 per cent were now entering the preservation age whereby they could access their super if they retired.

The fund currently has 52 authorised advisers on staff who can offer comprehensive financial advice to its members.

It has another 36 staff who can provide general advice to members and another 18 who can provide advice to members about moving between specific investment funds.

Mr Gregory said the proposed changes would result in a significant increase in the role of advisers at UniSuper and the provision of financial advice would become a key differentiator in the competitive super fund marketplace in future.

“At UniSuper, we have traditionally been highly competitive because of our low fees and our high investment returns but we now believe that the provision of advice will sit alongside that (market) proposition,” he said.

“Quality financial education, guidance and advice will be a key differentiator for us going forward.”

He said research done by UniSuper showed it had a large number of members who would be willing to pay for some form of financial advice if they could receive it from the fund.

“We have a large demand for advice which is continuing to grow,” he said.

“We see opportunity from the announcement to help this ‘missing middle’ of members who would not ordinarily seek paid comprehensive financial advice.

“Typically, they include members who have low balances in their pre-retirement and retirement years.”

Mr Gregory said research done by UniSuper had shown that members would benefit from the provision of financial advice and many did not understand issues around the interaction of superannuation and their rights to receive the age pension.

“Our research shows that financial advice accelerates decision making and member engagement,” he said.

He said members who received advice were more likely to make investment decisions and take proactive steps such as having a binding death benefit nomination around their super.

“The need for good quality, affordable and more accessible financial advice has never been greater, and we believe that super funds are well placed to provide it,” Mr Gregory said.

The super fund sector has been stepping up its role in the retirement sector following the advent of the Retirement Income Covenant in July last year which requires all funds to develop a retirement income strategy for their members.

But funds differ significantly in how much they have focused on the provision of retirement income products and how much financial advice they have been prepared to offer members under the current restrictive controls on financial advisers.