Data shows members embrace digital advice

Significant growth of digitally generated Statements of Advice and total Funds Under Advice during the past six months proves super funds are successfully engaging members via online offerings, says Decimal Software’s JAN KOLBUSZ.

An average 1,000 superannuation fund members are requesting online Statements of Advice every month, according to the latest data from enterprise digital advice provider Decimal Software.

The growing interest led to an additional $2 billion in Funds Under Advice being added across Decimal’s client network in the six months to the end of March, taking total FUA for Decimal platforms to more than $7.5 billion.

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According to Decimal executive director Jan Kolbusz, the growth shows that everyday Australians are embracing digital financial advice at a faster rate than ever before, proving its value as a low-cost, high-reach engagement option.

“For super providers implementing digital advice offerings, it is very much a case of ‘if you turn it on, they will come’,” Mr Kolbusz said.

“With the whole superannuation industry fighting to better engage members, this is clear evidence digital advice delivers the difference.”

By far, people in the 56-60 year age bracket are the most active when it comes to seeking advice on a range of superannuation topics, accounting for 10 per cent of the overall number of SOAs issued.

“They also seek advice on much higher dollar values than any other age bracket, accounting for more than 25 per cent of total FUA,” Mr Kolbusz said.

“The reason we’re seeing this emphasis on people in their pre-retirement years is due to funds focusing their digital advice initially on topics such as super accumulation and contributions – things that make a big difference in retirement.

“But with digital advice, super providers have the ability to offer advice across a broad range of topics, ranging from insurance to tax, so there are opportunities to engage all demographics on issues that matter to them.” 

Mr Kolbusz stressed that successful engagement relies on more than online calculators or generic financial education.

“Financial providers have seen minimal interaction or market growth through online calculators over the past decade,” he said

“Likewise, more recent ‘robo-advice’ offerings have tended to simply divert some existing customers to seeking investment advice via online means rather than in person.

“What we’re seeing with superannuation providers is that there’s a significant appetite among members to seek advice across many topics because it is easily accessible yet highly personalised to their individual situations and needs.

“Unlike traditional forms of advice that tended to focus on investment opportunities for those with assets to spare, benefits of digital advice from the superannuation perspective focus on changes people can make to provide immediate savings, take advantage of tax concessions and improve retirement outcomes.

“This makes digital advice and its ability to drive more meaningful engagement attractive to any provider of superannuation services.

“Enterprise digital advice allows the superannuation industry to do the long-term financial thinking on behalf of customers, creating a point of difference in a tight and increasingly competitive market.”

The latest engagement figures will be used in Decimal’s next Digital Data Insights report, which tracks usage habits by age, gender and advice topic across the company’s Australian superannuation clients.

The report is expected to be released in the coming weeks.

Jan Kolbusz is founder and executive director of Decimal Software, an enterprise digital advice technology provider to superannuation funds of all sizes across Australia.