Financial planning key to member retention: CoreData

Super fund members are drawing little help from their funds' financial planning services, opting to instead seek advice through independent advisers, bank planners and accountants, according to CoreData.

It presented funds with an opportunity to better communicate and engage their financial advice offering to members, CoreData head of advice, wealth and super Salvador Saiz said.

According to its latest annual post-retirement report, only one in 10 members (9.9 per cent) relied on their super fund's financial planning services as a primary source of advice regarding money and financial matters.

However, financial advice was seen as the most valued service for respondents in retirement (58.4 per cent) followed by financial counselling (57.1 per cent).

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Non-aligned financial advisers were found to be the greatest source of advice for respondents who used an adviser (33.4 per cent), followed by aligned advisers (24.9 per cent) and accountants (12.5 per cent).

Advice beat out direct investment options as an important factor in retaining members, with more than half of respondents saying financial advice services would encourage them to stay.

"What is surprising is that offering direct investment options such as term deposits and direct equities was one of the least popular ways cited for funds to retain members' business," Saiz said.

Lower fees, customer service and competitive returns (in that order) were lauded as the main reasons members would stay with their current super fund, he said.

CoreData found that respondents wanted retirement-specific investment options. Options that focused on sustainable income (45.7 per cent) and capital protection (45.3 per cent) were seen as the most popular products for members in retirement.

More than three quarters (75.3 per cent) of respondents wanted their main super fund to focus on investment options that delivered sustainable income, capital preservation and low volatility, while 78.9 per cent expect their super fund to tailor retirement investment options, according to Saiz.

One in four (27.1 per cent) respondents said self-managed super funds (SMSFs) offered the best retirement solutions, while industry and public sector funds were seen on equal footing with 19 per cent and 19.3 per cent respectively.

Retail and corporate funds lagged considerably, with 4 per cent and 1.8 per cent proposing they had the best retirement solutions.

Acutely aware of the rising cost of living, more than four in five (83.5 per cent) said they planned to work beyond retirement.