Super funds lead advice charge

Published: Financial Standard (8/6/2010) - View original article

Super funds will lead innovation in the advice sector as intra-fund advice grows, leaving many advisers to play catch up, according to tech firm, Provisio Technologies.

A number of superannuation funds now deliver advice with greater efficiency than financial planning groups because they are more open to new approaches, according to Cameron O'Sullivan, adviser and director of Provisio Technologies.

Innovations being adopted by super funds means they are beating many financial advisers at their own game, he said.

"By starting from a virtually clean slate, many super funds have taken advantage of more efficient processes and the new generation of Rapid Advice Delivery software to deliver high-quality advice in ways which the financial planning industry is yet to adopt.

"The super funds have been forced to look at alternatives in order to provide reasonably priced, quality advice for many thousands of members.

"They now pose a competitive threat to a portion of financial planners' client bases, by offering a cheaper and faster advice alternative," O'Sullivan said.

O'Sullivan said that a key to the superannuation funds' greater efficiency is due to the focus on delivering transactional advice, rather than the planner's historical holistic financial plan.

"This represents a huge challenge to traditional notions of holistic advice.

"Transactional advice relates to a specific member need, such as the amount of insurance cover they require, or the most tax effective way to make additional super contributions.

"In contrast, many planners still feel obliged to deliver a full financial plan, rather than providing specific, targeted advice."

With many super funds also looking ahead at initiatives such as the delivery of advice over the internet and personalised direct mail campaigns to members regarding strategies specific to their financial circumstances, it would appear that super funds are continuing to take the lead in innovating the financial planning space, he said.

"Intra-fund has provided the opportunity for the superannuation industry to take a refreshing new look at the entire financial advice process.

"Meanwhile, most financial planning groups are still attempting to achieve Rapid Advice with some kind of cut-down version of their holistic planning software.

"This will never achieve the required efficiency in this market and is it for this reason that funds have looked at entirely new tools for this space," O'Sullivan said.