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Super members don’t connect with the word ‘advice’
Superannuation members have no connection with the word “advice” and funds need to simplify their language to engage members, according to Cbus Super.
Speaking at the Australian Institute of Superannuation Trustees (AIST) Super Financial Advice Symposium, Cbus head of advice, Lynda Cross, said super members did not have a good understanding of what ‘advice’ meant.
“An example of that is we gave members an opportunity to choose ‘advice’ on our IVR ]interactive voice response] and what we discovered was that around 35% of people that selected advice actually needed help with the fund or needed some information,” Cross said.
“We know the word ‘advice’ might not be the right way to engage them if we’re asking them to start getting help or guidance from us around retirement.
“We really need to reframe advice. Make it easier to get the help they need when they need it and for it not to be an intimidating word that they don’t understand.”
Cross said personal advice members also needed someone that spoke their language.
“The industry needs to think about how we interact with members and making sure every time we do we use that as an opportunity to guide and help them, and provide advice to them,” she said.
“It doesn’t mean a 20-page statement of advice [SOA] every time. It could be a gentle nudge saying ‘here’s some info and how it might apply to you and what it means to you’.
“Try to make every opportunity to engage with members about the retirement concept and try to provide some form of advice.”
Cross noted that funds could make SOAs more like a brochure or a visual document that was short, sharp and simple.
“We can make it all of those things even with the compliance regime we have. It means more members are more likely to read it and follow our advice,” she said.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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