Global financial services group Mercer is urging superannuation funds to make sure they are ready to provide financial advice to their members in a sustainable way over the coming year.
As regulatory changes come into play, Mercer believes that funds should figure out the best way to give advice to members – whether it be in-house or outsourced – in order to remain relevant.
The company stated that trustees should consider the pros and cons of each, and determine the liability of the options to ensure there is an avenue for members to obtain financial advice — particularly on superannuation issues — through the fund.
This is just one recommendation that has come out of Mercer’s checklist of the critical issues for superannuation in 2011, which was created to help trustees and fund providers deal with impending regulatory change.
“Over the next few years a number of legislative changes will come into effect as a result of the Super System Review (Cooper Review), and superannuation funds must start preparing now to ensure a smooth transition,” said Mercer’s head of defined contribution consulting in Australia, Russell Mason.
Among the other areas of compliance trustees and funds should consider are making sure administrators will meet Super Stream requirements, ensuring default investment options meet MySuper requirements, and keeping up an adequate operational risk reserve.
Funds are also being urged to finalise their short-form Product Disclosure Statement by 1 July, 2011, and ensure that total and permanent disability products meet new tax deductibility requirements for trustees.
Greater communication and interaction with members is also listed as being of increasing importance as changes come about.
