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Home / Plan your retirement / Financial advice / Financial advice through super funds: What’s on offer?

Financial advice through super funds: What’s on offer?

September 15, 2020 by Barbara Drury Leave a Comment

Reading time: 10 minutes

On this page

  • COVID and calls for more affordable advice
  • Advice services are expanding
  • Types of advice offered by super funds
  • How is advice delivered?
  • The cost of advice
  • Who pays for advice?
  • Challenges and trends
  • Quality of super fund advice
  • Risks and remedies

All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Learn more


Super fund members watched with alarm as the value of their super and their retirement plans were rocked by the COVID-19 crisis. Yet one of the many unanticipated consequences of the pandemic could be greater awareness and uptake of financial advice offered by super funds.

The Investment Trends 2020 Financial Advice Report found one in six Australians say they currently use intra-fund advice services offered by their main super fund. And 37% of those who don’t, would like to do so.


Need to know: ‘Intra-fund advice’ refers to simple, personal advice provided by superannuation funds to their members where the cost of the advice is borne by all members of the fund. This advice is strictly limited to the member’s super account with that fund.


“Many members rely on their super fund for help across a range of intra-fund topics, most often seeking advice around voluntary super contributions, switching investment options and retirement planning,” says Investment Trends senior analyst, King Loong Choi.

Yet he says there is also unmet demand for advice on a broader range of topics such as investment outside super, tax strategies and budgeting. Surprisingly, it was younger members under 35 who wanted more advice (77% versus 70% for the broader population).

COVID and calls for more affordable advice

While there has been rapid growth in financial advice offered by super funds, the stumbling block for members is often cost and accessibility.

A recent survey by KPMG found that although 59% of people agreed that the COVID crisis made them more aware of the need for financial advice, only 32% were willing to pay for it.


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As it often the case with a crisis, COVID has fast-tracked change.

As a temporary measure, ASIC allowed super funds to offer affordable and timely advice to members who were considering whether to use the early access scheme without some of the usual regulatory red tape. Funds were temporarily exempted from providing members with a statement of advice (SOA) when providing advice about early access to super. Instead, they were able to provide a simpler, cheaper record of advice (ROA), with a fee, if any, capped at $300.


Need to know: According to ASIC, a statement of advice (SOA) is a document that sets out the advice given to a consumer by their licensed financial planner or adviser. It must include the basis on which the advice is given, details of the providing entity, and information on any payments or benefits the adviser or licensee will receive.


As welcome as this temporary measure is, it is likely to increase calls for more. For more on this, and industry calls for more increased access to affordable advice, see SuperGuide SMSFs and financial advice: A matter of cost and trust.

So what advice do super funds currently offer?

Advice services are expanding

More than a decade has passed since ASIC gave the thumbs up to super funds providing personal financial advice over the phone, via email or face-to-face without establishing members’ overall financial position, provided the advice was limited to their super account.

As mentioned earlier, this is referred to as intra-fund or scaled advice, because it is only available to members and it’s offered at various levels of complexity and price, depending on your needs.

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These advice services are offered by most industry, corporate and public sector funds, as well as retail funds that you have accessed without the help of a financial adviser.

If you have what is referred to as an ‘advised super product’ such as a super wrap, where you need an adviser to gain access to the product, then you won’t be offered free advice or other intra-fund advice services.

In the lead-up to this change, Head of Research at Chant West Ian Fryer says funds were saying they offered general advice, but members were asking ‘what should I do?’. Now more funds are answering that question.

Types of advice offered by super funds

The advice currently being offered by super funds falls into three broad categories or levels of advice:

  • General advice or information. The name your fund uses might be different, but the first level of advice is the same across the board and often starts with their call centre. They can provide information on specific topics related to your account or the fund’s offerings to help you make decisions. For example, information about your investment options, super contributions, insurance options, transition-to-retirement pensions or withdrawals. What they can’t give you is personal advice or recommendations.
  • Simple personal advice. The next step is simple personal advice on a single issue. For example, you might be in your fund’s default MySuper option but wonder if it’s the best option for you. This advice begins with a free, no-obligation phone consultation followed by a statement of advice (see note above) with recommendations for a fee (see ‘The cost of advice’ below).
  • Comprehensive personal advice. The next step is more complex financial advice that takes your full personal circumstances into account. This is for members who don’t have an adviser but who may want a financial plan. This might include advice on insurance, tax structures, retirement planning, aged care and estate planning. Advice is provided by Certified Financial Planners (CFPs) with an Australian Financial Services Licence (AFSL) from the Australian Securities and Investments Commission (ASIC). Some are employees of the fund while others are external advisers. This advice also starts with a free, no-obligation conversation with information about the fees you will be charged if you choose to proceed. Some funds offer face-to-face consultations, help with implementation and review.

Some of the biggest innovation in the provision of financial advice by super funds is the method of delivery.

How is advice delivered?

After years of rapid industry growth and consolidation, large super funds are finding that they can no longer get by with a handful of their own in-house advisers. To scale up the advice they can offer members, more funds are outsourcing.

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Ian Fryer says there are currently two advice models:

  • In-house: Some funds employ their own in-house salaried advisers
  • Outsource: Some funds fully outsource while others retain some in-house advisers and outsource the overflow.

In another example of the impact of COVID, face-to-face meetings with your adviser are increasingly likely to take place via video, a trend that could be here to stay.

At the same time, COVID has increased the uptake of digital services across the economy. Some funds are beginning to see a digital first strategy as a means of reaching more of their members in an affordable way. As the technology becomes more sophisticated, digital advice is likely to become more personalised (see Link Advice case study below).

There is no right or wrong model, with good examples of innovation using both in-house and outsourced approaches. The following fund examples are for illustrative purposes only; they are not recommendations.

In-house

Aware Super (the new name for First State Super and VicSuper which merged in July 2020) and UniSuper are examples of not-for-profit funds with their own salaried advisers on a reasonably large scale.

Aware Super has around 230 advisers in over 40 locations, mostly in NSW and Victoria, following the purchase of the StatePlus financial planning business. It now has the largest not-for-profit advice business in the country. UniSuper has advisers on every campus where it has members as well as those who can deliver advice over the phone or video.


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Like all not-for-profit funds, advice is on a fee-for-service, no-commission basis. Advisers are certified financial planners covered by an Australian Financial Services Licence. The cost of advice is disclosed upfront, after an initial free, no-obligation consultation and will depend on the extent and complexity of the advice required.

Fryer says one of the reasons this model works well for these funds is that the concentration of members is quite high. Most are public servants or academics clustered in and around Sydney, Brisbane, Melbourne or on university campuses. For example, UniSuper’s advisers spend much of their time on university campuses so they are readily accessible. UniSuper won Chant West’s 2020 Best Fund, Advice category.


Case study: Aware Super (formerly First State Super and VicSuper)

Aware Super head of advice Sarah Forman says the fund’s membership is skewed towards older members, so most of the advice they give is around retirement planning. At a certain point, members are faced with decisions about moving from accumulation to pension phase and investing their retirement savings to achieve their desired income levels.

Even so, she believes there is significant value in members seeking advice earlier in life.

“Simple decisions made when you are younger, such as contributing an extra $50 a fortnight, can have a material impact by the time you retire. But if you haven’t thought about it, or no-one’s explained the benefits to you of compounding returns and risk profiling, then some of those opportunities are lost over time.”

Forman says the most common topics of intra-fund or general advice are around investment choice, contribution levels and setting up pension income streams. One popular topic that lies just outside intra-fund advice is consolidating super held with two or more funds.

For those seeking more comprehensive advice, she says there’s help with making the most of your contributions right up until the last possible moment and making sure you are structuring everything to maximise the tax effectiveness as well as Age Pension entitlements. Forman says helping people model Centrelink outcomes is another important area that lies just outside the scope of intra-fund advice.

As well as having over 200 financial advisers, the group also has seven specialist advisers covering estate planning (e.g. wills and transitioning assets between generations within families), aged care (for the member, their partner or parents) and insurance both in and outside super.

Forman says about 20% of the personal advice they deliver is on a single issue, while the rest is for more comprehensive advice and strategy.

Post COVID, the fund is only doing a limited amount of face-to-face advice. The majority of interviews are taking place over the phone or video, which Forman says has benefits such as reducing wait times in locations with high demand.


Fully outsourced

Sunsuper used to have a handful of in-house financial advisers for their million-plus members. Now, when members want more than simple or single-issue advice (which is free over the phone), they are referred to an outside financial adviser who is culturally aligned with the fund. The advice fee can be deducted from the member’s super account.

Advisers are given access to a fund portal where they can get information about the client to help tailor their recommendations. Lack of access to this information has been a criticism of advisers in the past.

“We think the open architecture of Sunsuper works well; it also removes conflicts of interest because advisers are not obliged to sell Sunsuper’s products”, says Fryer.

Retail super funds also outsource advice for members who come to them independent of an adviser, but this is generally to their own dealer network.

For example, non-advised members of BT’s Super for Life products are referred to Westpac advisers (BT is part of the Westpac group). BT offers free general factual advice but members who want personal advice will be referred to an adviser after an initial free, no-obligation conversation. The adviser will then arrange a second appointment where the cost of advice and products will be disclosed before proceeding.

Partial outsourcing

AustralianSuper is one of the funds that have tweaked the outsourcing model by retaining its own advisers through Industry Funds Services and augmenting this with a panel of accredited advisers around the country.

With more than 2.2 million members (one in ten working Australians), Australia’s biggest fund realised it needed to outsource to get the scale it needed to provide comprehensive financial advice.

AustralianSuper is one of 17 super funds that outsource some advice functions to administration services provider Link Advice, part of the ASX-listed Link Group.


Case study: Link Advice

Link Advice general manager Duncan McPherson says the group provides a range of advice services to corporate, retail and industry funds and one mid-tier bank including:

  • Digital advice for three funds, including Hostplus, and is in development with two more
  • Telephone advice for AustralianSuper, Russell, ING and others
  • Licensee services for financial advisers employed by super funds including Mercy Super and Rest Super. Link provides them with services such as compliance, software, templates and professional development.

McPherson says digital advice is an emerging trend that is still finding its place in the market. Link provides the technology that sits on the fund’s website and members go through a self-directed process.

“We ask them for details about their income, their assets, we do a risk profile, we work out how much insurance they need – so it’s the same as intra-fund advice,” he says.

However, the biggest part of the business is still over-the-phone advice. “This is predominantly intra-fund advice, but we do some simple retirement advice that people pay for. Over the past 12 months we have given advice to 15,000 members over the phone with a team of 22 qualified advisers,” he says.

McPherson says the main reasons people seek intra-fund advice are:

  • Am I in the right investment option? This has been the most popular topic since COVID. For example, they may be in the balanced option but after completing a risk profile find that a conservative option is more appropriate.
  • Simple retirement advice. For example, I want to retire with x, how much do I need to contribute to my super now? So we discuss salary sacrifice and personal contributions into that fund.
  • Insurance. For example, how much insurance do I need and what does it cost within the fund?

All of these members would get a statement of advice (SOA).

However, McPherson says there often comes a point in the phone conversation where it becomes obvious the member needs more comprehensive financial advice.

“They might have financial considerations elsewhere so if we didn’t take that into consideration we would not be acting in their best interests. We probably referred over 200 people to comprehensive advice last month and there were probably another 50 who declined it. Those who decline predominantly say they are not ready yet, followed by the cost of advice.


The cost of advice

While personal financial advice is getting easier to access via your super fund, it’s still difficult to know what it will cost until you contact your fund or their nominated adviser and agree on the scope of advice you want. The reason given for this is that each person’s needs will be different, but it could pose a disincentive for many people.

The range of charges is huge. Ian Fryer says some industry funds subsidise advice while others charge a similar amount to outside financial planners. He says feedback from funds indicates that fees for comprehensive advice generally range from $1,000 up to around $3,000.  

Aware Super’s Sarah Forman says the bulk of advice for their members is around the $2,500 level. A single issue such as consolidating two or three super accounts might be $1,600, while a comprehensive financial plan could go as high as $8,000, depending on the needs of the client and the complexity.

“We are passionate about re-building trust in advice and part of that is helping people understand the value of financial advice. The challenge is that we are often designing moves that need to be made now but the outcome of these moves won’t be known for many years to come,” she says.

Link Advice’s Duncan McPherson cites similar figures. “There is a big gap between intra-fund advice that can be offered at no cost to members and face-to-face advice which generally starts at around $2,000–$3,000,” he says.

“Some people do baulk at the fee,” says McPherson. “Everyone should have the right to advice but quite often (the industry) defaults to people who can afford to pay for it. We talk to people with $60,000–$100,000 in super and they just want to understand it more and make the most of what they’ve got. We’ve got to help with informing and educating as well as advising (members).”

To give you an idea of the average cost of financial advice from a licensed financial planner, SuperGuide has reported on the latest surveys. For example, in 2019 the Financial Planning Association of Australia (FPA) found that its members charged, on average, $2,671 to prepare a statement of advice (SOA) for new customers and $3,757 a year for ongoing advice (based on a client with around $750,000 in assets). These are averages only and don’t take into account the complexity (or simplicity) of advice you may need, or the value of your assets.

There is a lot of discussion in the superannuation industry at the moment about making advice more affordable and accessible to everyone who needs it. McPherson says super funds have got a role to play because they are trusted and there is research that supports that.

“We know that if people take a little more interest in their super, they’ll be better off. It’s about helping people answer some simple questions so they can get on with other stuff.”

Who pays for advice?

‘Free’ intra-fund personal advice is appealing but the downside is that it is subsidised by all members via the administration fees they pay.

Fees for more complex personal advice may be paid directly by the member or deducted from their super account, depending on the fund.

However, funds are under notice to scrutinise financial advice fees deducted from member accounts. ASIC and the Australian Prudential Regulation Authority (APRA) recently wrote to funds instructing trustees to review their governance of these arrangements, to ensure they satisfy the sole purpose test and are in the best interests of members.

The Government wants to go further and ban the deduction of advice fees from MySuper products. This was one of nine recommendations concerning super to come out of the Banking Royal Commission. Legislation is still pending but, if passed, this would impact funds that outsource financial advice and allow advisers to deduct fees from members’ accounts.

Challenges and trends

One of the biggest challenges facing super funds is the unmet demand for affordable advice around retirement, especially for members with a mid-level balance.

McPherson says the volume of calls to super funds for advice since COVID has been extraordinary, many of them pre-retirees. “People close to retirement may have lost their job, had their hours wound back or be worried about their future employment and want to know what their retirement options are,” he says.

He says someone with, say, $300,000 in super and eligible for a part Age Pension doesn’t have a huge amount of money to be paying for ongoing advice. They may need help accessing Centrelink benefits, developing a financial plan and implementing it.

For some in this group, he says intra-fund advice may be a stepping stone to comprehensive advice. For others, Link is working on innovative approaches using phone and video conferencing to help people not only develop a financial plan but implement it at an affordable price.

Wealthier retirees with more complex finances are more likely to have their own advisers.

People with a low super balance receive a full Age Pension, but many want advice on how to do that. “It can be a daunting process but delaying can cost pension payments they would have received if they had applied earlier,” says McPherson.

Quality of super fund advice

As things stand, the quality of advice offered by super funds is mixed. Some funds offer a similar service to external financial advisers, but most funds are still unable to offer anything beyond advice on your super account.

Fryer says one area that needs work is that SOAs are generally little more than compliance documents full of legal jargon that many members find hard to understand. He believes this is a major reason why only around half of those members who inquire about advice take it up.

Intra-fund advisers are also at a disadvantage because they can’t follow up with members who are left to implement the advice themselves. Implementation is higher with a personal financial adviser because they do it for you.

Risks and remedies

When you seek simple, factual advice from your super fund you are only going to get advice about their investment options and services, so to that extent the advice you get is limited if not conflicted. However, under ASIC rules super funds are required to manage conflicts of interest in their dealings with members.

Fully outsourced advice does away with some of the concerns about conflict of interest because advisers can offer products from other funds, including advice on SMSFs.

If you are not happy with the advice you receive or you have a complaint, you should take your complaint to your super fund first to give them the opportunity to address it.

Then, if you are still not satisfied you can lodge a complaint with the Australian Financial Complaints Authority (AFCA). This is a free ombudsman service whose decisions are binding on superannuation fund trustees.

For more on super complaints see the following SuperGuide articles:

  • Who to turn to if you have a problem with your super or financial adviser
  • 3 steps to making a complaint about your super fund

 

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Learn more about financial advice in the following SuperGuide articles:

8 warning signs of a bad financial adviser

March 3, 2021

Getting financial advice? What your adviser needs to provide

February 11, 2021

Find an Australian independent financial adviser

February 1, 2021

Can I get free financial advice?

September 15, 2020

Finding a good financial adviser and making financial advice work for you

June 1, 2020

How much does financial advice cost?

June 1, 2020

What is the value of financial advice when it comes to your retirement?

March 14, 2020

5-step guide to the different types of financial advice on offer

December 14, 2019

7-point guide to what happens when you meet a financial adviser

December 13, 2019

Financial coaching: What is it and why may you need it?

October 3, 2019

Financial advice: What are the risks and benefits?

March 19, 2019

Super advice: How to find a suitable financial adviser

March 15, 2019

Super funds mentioned in this article

First State Super (First State Superannuation Scheme) VicSuper (Victorian Superannuation Fund) UniSuper Sunsuper Superannuation Fund AustralianSuper

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IMPORTANT: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more

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All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs.

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If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

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