Super system still too complex for many members

There is still education that needs to be done for superannuation fund members to help them understand the stapling changes, according to Allan Gray.

Stapling was introduced last year and would see members ‘stapled’ to one super fund for their working life, unless they opted to change, in order to reduce the number of duplicate accounts.

Speaking to Super Review, JD de Lange, chief operating officer at Allan Gray, said he was concerned stapling would give the idea that superannuation was a simple choice.

“A super fund is just a tool and the ability to use it depends either on your research or going to get advice. There’s no easy way to do this and I’m actually very scared that people will try and simplify this too much.

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“I’ll be surprised if people understand the concept of stapling, superannuation is already a very complex product.

“There’s a lot of education that needs to be done, there’s no understanding of super funds among kids when they start work, they don’t know what to do or where to start. And I think that’s a puzzle to solve.”

His colleague, head of product, Deborah Barr, added members would likely still opt for multiple super funds over their lifetime as their needs changed.

“You may stick to the first fund for the first few years but ultimately, as you grow and mature, people will be interested and engaged in their own savings and exercise choice.”

The firm’s superannuation product, which was launched in 2018, offered exposure to managed funds, listed securities, term deposits and managed account model portfolios and said it was designed to transition through a member’s lifetime. For advisers, they were able to build model portfolios and set up managed accounts within the product.

Barr said: “You need to find something that enables you to have a choice and allows you to move around with your risk appetite as your needs change at different life savings.

“It’s a cradle to grave solution whether you are in accumulation phase, transitioning to retirement or going into a pension.”