Super fund advice provision to create greater holistic advice transition

Co-CEO and founder of Padua Solutions, Matthew Esler, said the QAR recommendations pushing for superannuation funds to provide more advice should not be cause for concern among advisers as this would allow greater access and transition for clients, in turn creating more opportunities for financial advisers to provide holistic advice to clients.

“I think it’s great that super funds are having an expanded remit and I think from an adviser’s perspective, there’s a couple of things that need to be understood when we talk about an expanded footprint for super funds,” he said on a recent episode of the ifa podcast.

“Firstly, they’re only talking about advice related to the member and related to the member’s holdings in that fund. It’s very restrictive in terms of what advice the super fund can provide, but I think it’s really relevant and helpful for super funds to be providing members with advice and getting them on that journey.

“It actually makes the transition to full financial advice or holistic advice easier and advisors really need to be supporting these measures. There’s 2.6 million Australians paying for advice, but there’s 41 per cent, nearly 10 million Australians, that want advice.”

Mr Esler said the opportunity to provide a better process in the provision of advice could help solve accessibility and affordability issues in the industry.

“There’s less than 16,000 advisers in the market now. There’s been a huge fall in the number of advisors, it’s been widely publicised. The advisers that we are dealing with are really focusing more and more on the higher end and having to be more selective about the clients they can bring on because they can’t provide advice to everybody,” he noted.

“As a result, I think the super funds really do fit into that lower end of the advice spectrum very well. I believe it helps transition across to holistic advice. It’s definitely restricted in the advice that can be provided.

“I don’t think advisers should be looking at the super funds having an expanded remit as a negative thing because it’s quite often the case when you look at social media, you think it’s the worst thing in the world, but it’s actually a great thing for advisers be accumulators into that idea of getting advice.”

Mr Esler added that advisers should instead be looking to set up referral arrangements with super funds to bridge the gap between their different service offerings.

“We are seeing that quite a lot now with the industry funds, where they’re actually setting up referral partnerships with advice groups. There’s plenty of these referral opportunities that advisors can get involved with,” Mr Esler explained.

“If you’re worried about super funds taking clients off you, then you need to be thinking about it more strategically and thinking about who I can set up referral arrangements with to ensure that I get the clients that I want.”

“Certainly, the clients that they’re referring to, the members who are looking for contribution advice or restricted intra-fund advice, so it’s only related to those holdings. But at the end of the day, the referral opportunities that you can get from the super funds are the more holistic-type client, which is the clients that most advisors are wanting to go for.”

To hear more from Mr Esler, click here.