Hostplus reports surge in advice revenue

In a hearing of the House economics committee on Thursday, committee chair and Liberal MP Tim Wilson pointed to an increase in advice revenue noted in Hostplus' annual cost recovery statements, from $148,992 in 2015 to $1.27 million in 2020.

Hostplus group executive of member experience Paul Watson confirmed the increase, saying the fund had looked to more clearly differentiate between comprehensive and intra-fund advice services following the FOFA reforms.

"If i went back to 2015, we were providing a lot of simple episodic advice and not as much comprehensive advice as we are today, we also had one team that was providing advice across both limited and comprehensive advice," Mr Watson said.

"The increase in fees over that period of time is a result of an increase in engagement and having members engage with [an] adviser in the pre-retirement and retirement phase to develop plans and recommendations for retirement, that is reflected in the cost recovery. That’s the increase in both number of SOAs and the fee for service attached to those."

Mr Wilson also pointed to Hostplus' adviser numbers declining from 10 to 7.74 over the five-year period, which Mr Watson said had been the result of an internal efficiency review.

"The drop in number which is two people – it's 7.74 because we have a couple of people not working five day weeks – we had a planner in north Queensland and also a planner attached to the Gold Coast office, and we took the opportunity to consolidate those into the Brisbane office and have our planners travel to those locations to assist members as part of our efficiency review," he said.

Mr Watson said the fund had seen a significant increase in member take-up of comprehensive advice over the five years, which was paid for on a fee-for-service basis and usually charged outside of super.

"Members have the opportunity to deduct from their account the part of the advice that relates solely to that interest – comprehensive advice can take into account a range of people’s interest outside their super, so the majority seek to pay for it from sources other than their Hostplus account," Mr Watson said.

"Their adviser can also approach Hostplus in terms of having some of the cost met, but our experience has been that very few members wish to avail themselves of that service."