Focus on advice, not investment returns

Superannuation funds have been spending billions of dollars on a year on investment management and not nearly enough on financial advice.

That is the assessment of a SuperEd co-founder, Jeremy Duffield who is arguing the provision of the right advice to superannuation fund members can make a bigger difference to their retirement incomes than investment management.

Duffield will tell this week's Association of Superannuation Funds of Australia (ASFA) conference in Brisbane that he believes it is advice, not investment alpha, which will ultimately deliver better and more sustainable retirement incomes for fund members.

"Despite this, the industry continues to be obsessed by seeking excess investment returns and spends in excess of $10 billion a year on investment management — a figure which dwarfs the meagre allocations to advice and better education for super fund members," he said.

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Duffield said he would be telling this week's conference that super fund boards have the best opportunity to improve member outcomes through an increased focus on advice.

"Expanding access to advice to members can have a substantial pay-off in terms of higher sustainable retirement incomes," he said.

"Advice is critical to helping members achieve their personal retirement goals," Duffield said.

"But today, even the best resourced advice teams provide only a fraction of the membership with advice in any given year. As an industry we need to turn this around and deliver quality advice to the majority of super fund members."

Duffield said the delivery of expert advice en mass required funds to embrace technology and that funds could not deliver advice to mass memberships without digital advice being a key component of the total offering.

The longer it takes for funds to deliver a member-centric advice solution, the more they miss the opportunity to help members optimise their retirement incomes and show that they can help them with their retirement stream.