Workplace super requires different ‘mindset’

ifa recently reported on comments made by IOOF that providing workplace super services could present new growth avenues for advice practices.

Speaking to ifa following these comments, WSSA chief executive Douglas Latto agreed that providing workplace super advice could help practices grow, but added that there are caveats to this.

“What IOOF say is correct, there’s the potential to greatly grow your business if you do it properly, but you’ve got to have the resources to be able to do it, otherwise you’re not going to achieve that outcome,” he said.

“The challenge is changing your mindset as an adviser.”

Mr Latto said advisers need to be able to deliver advice “at all levels in the company” from chief executive down to support staff, “so you can’t just have a high-net-worth target base”.

Scale is also important in the provision of workplace super, Mr Latto said, noting that the “fixed cost element” of these services means advisers need to “deliver those services profitably within what [they’re] being paid”.

“It’s very hard for an adviser to do just one or two little funds and do it profitably, because you need a certain amount of resources to be able to deliver, and therefore scale comes into it quite considerably,” he said.

The amount of resources and scale needed will also vary based on individual clients, Mr Latto said, and there is no hard and fast rule for the kind of scale and resources a practice will need in order to successfully provide workplace super services.

“To give you an example you take a hundred-person company and they’re all in the one place, the resources to deliver for that company are not too high,” he said.

“But if it’s a hundred-member company with five different offices and you have to do a seminar in five different places throughout Australia, the cost of that is quite considerable.”

Advisers must also be aware of the differences between personal advice and the advice provided to business clients under this type of arrangement, Mr Latto said, as it would be inappropriate to advise a business in the same way as a personal client.

Regardless, Mr Latto said advisers who are able to meet these hurdles will be presented with opportunities to grow their practice and build their client base.