There also seems to be an expectation across the industry that the Quality of Advice Review will deliver the silver bullet to make this happen.
But Adrian Gervasoni, Executive Manager, Advice Solutions at Industry Fund Services (IFS) has a different view. “Yes, the relaxing of the regulatory environment will help us make greater inroads. But there’s nothing stopping us from doing advice differently now - within the current regulatory framework, with our existing technology solutions, and with current adviser numbers. It all starts with the service model.”
IFS is now the largest licensee and advice services provider to the superannuation sector in Australia. Our partner funds between them have over 5.54m members and are custodians of $460bn in members’ retirement savings1.
“It has long been our ambition to improve the outcomes for members of the funds that our advisers serve, and it’s something IFS has passionately advocated for in recent years. In mid-2020 we brought together a large group of partner-funds and industry stakeholders to consider the impact of the regulatory framework on our ability to deliver affordable and accessible financial advice” Gervasoni said.
“With a single-minded focus on improving the way financial advice is delivered to ordinary Australians, we set about identifying issues requiring regulatory guidance and prioritising areas for reform.”
“Most importantly,” Gervasoni explains, “we did this with an agenda of supporting the development of new models of service design that placed the consumer front and centre, without being constrained by legislation. Through this process we recognised we can make a significant difference to the financial outcomes of members now. We don’t have to wait for that silver bullet, or magic widget that will deliver a solution.”
“We already have the technology, and we already have many of the tools. The question is whether we have the right service model in place that will provide better decision support to members and help them learn new habits – habits that will help them grow their super balance during their working lives and help them spend their superannuation savings with confidence in retirement.”
Gervasoni says “IFS has been doing a lot of work with some of our partner funds in interrogating and re-building service models. We’ve identified what we see as six key areas that require absolute role clarity of jobs for the member and jobs for the super fund.
“We believe that how these tasks are carried out and by whom will have the biggest impact on retirement outcomes for members. So, it is essential that the tools and resources, already available to super funds such as statements, calculators, call centre resources, email campaigns and other communications are organised and focused single-mindedly around generating actions that support these outcomes.
This is the work that funds should do now and can do now.”
With millions of Australians expected to retire in the next decade, and the Retirement Income Covenant placing additional obligations on trustees to deliver an effective retirement income strategy, many funds are ramping up their advice services.
“We look forward to the responsible and considered implementation of the final Quality of Advice Review. We see it assisting in the design of service models that better allow advice to be scaled. Put simply, a more flexible regulatory platform should allow superannuation funds to increase their risk appetite to test new ideas. However, IFS is not waiting for changes to be implemented” said Gervasoni.
“We believe that purposeful service design - not the regulatory framework - is the key to delivering consumer outcomes.”