Non-profit super funds seek IFA partners

28-Aug-2017

By Sarah Kendell

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Not for profit superannuation funds are increasingly looking to partner with independent adviser networks to better service fund members with more complex financial needs and those who live in remote areas, according to Rice Warner.

Speaking at the Workplace Super Specialists Australia Conference 2017 in Sydney on Friday, Rice Warner head of client relationships Steve Freeborn said non-profit funds were increasingly realising the value of a full financial advice proposition when it came to retaining high-balance members as they reached retirement.

“You are going from an environment where retail [funds] historically had a comprehensive product offer with advice and all the bells and whistles built in and industry funds were quite vanilla products with no service proposition, and what is happening is that they are realising a value proposition with advice is key,” he said.

“They are developing advice and member communications, they are building in corporate relationship management teams and programs to recognise that their institutional clients want the same service that they would get out of a retail organisation but they don’t necessarily want to buy it from a retail fund.”

While funds were looking at “guided advice” via technology to service the mass market and members with simple advice needs, they were also looking at partnering with independent advice groups to ensure all members could receive a consistent personal advice service if they needed it.

“Increasingly they are looking to the IFA (independent financial adviser) market because their challenge is that their members are geographically dispersed around the country, so they want to be able to access [advice] in different geographic regions, different suburbs and to provide advice that is consistent with what they are trying to do,” Freeborn said.

“A lot of their systems are not geared up for [a referral relationship] and many won’t pay a relationship management fee because they don’t know how it works, so there are a few things on the fund side they are still coming to terms with but overall the opportunity is enormous.”

While some funds were nervous about losing clients to self-managed or retail super funds through an IFA referral service, the retail and non-profit sectors of the market were not as adversarial toward each other as they once had been, Freeborn said.

“[Non-profit funds] are increasingly thinking about their funds as businesses and swapping their executives with people from the retail funds and product providers they used to compete with,” he said.

“Some of the better funds have identified that they have a lot of members that are going to leave anyway if they don’t offer advice, so they are better off finding aligned advisers that they can refer to.”

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