Larger superannuation funds, particularly industry funds, are likely to rely more on digitally-generated advice but need to know more about their members to do so, according to a Rice Warner analysis.
The analysis said the reliance, augmented by human-based advice, would be a means to improve and expand the fund’s existing advisory services and engagement with members.
Rice Warner said digitally-based advice would be the next logical step as most members relied on the automatic rebalancing of premised diversified portfolios designed to suit their broad risk classification at a generally low cost.
“Super funds are likely to seek further development of the self-directed and guided advice tools… These include calculators covering adequacy of retirement savings, contribution optimisation, insurance needs and risk profiling,” the analysis said.
“The calculators are designed to let members know their current position and how to improve that situation; effectively providing a call to action.”
However, the research house said many industry funds did not know enough about their members to provide personal robo-advice.
“Many industry funds, do not know their members’ incomes, total super and non-super assets, marital status, partner’s assets and superannuation, liabilities or financial goals,” it said.
“The introduction of robo-advice will provide an opportunity for super funds to get to know and segment their members much better.”
While Rice Warner said in theory robo-advice should provide a consistent standard of advice, the quality would depend on the quality and appropriateness of the information and rules programmed into the software.
