With a growing demand for the intra-fund advice, the industry will need to have a proper debate on what it represents in order to make sure that all parties involved fully understand it, according to Link Advice which specialises in providing advice for superannuation funds.
Link Advice’s chief executive, Duncan McPherson, said the discussion around the concept of intra-fund advice will be a growing trend across the industry in the coming months as members and consumers are starting to engage more with their retirement savings.
“We are talking to people who haven’t got large balance in super who actually don’t understand much of their super and what they are doing is they are talking to their super fund and we are helping them by giving intra-fund advice,” McPherson said.
At the same time, according to Link Advice whose main clients included retail, corporate and industry superannuation funds, there was still a lot of uncertainty across the advice industry, in particular around regulation regarding intra-fund advice.
“We are regulated exactly the same as any other advice business, in the last 12 months in fact our business, because it worked with a lot of large superannuation funds, we’ve been through five audits by Big 4 accounting firms, within the last 12 months.
“They are looking at the business models and they are making sure that they are no gaps in their business models.”
According to Link Advice’s chief executive, there would be a growing advice gap due to a combination of the continuous exodus of planners, higher specialisation of advice businesses and growing awareness among the super fund members were more engaged with the plans around their retirement savings.
“I think we’ve clearly seen a move to specialisation and one of the risks that the Royal Commission and the Australian Securities and Investments Commission [ASIC] even talked about is the risk of a growing advice gap. Because we are seeing an exodus of planners and as a result of this is there will be less planners despite more people wanting advice,” McPherson said.
Link Advice said this would hold true particularly for the traditional advice models which aimed to provide an advice on the broad range of topics.
On top of that, superannuation funds grappled with the regulatory attention and responsibilities for the advice provided to their members.
“Here’s the opportunity for advisers to really prepare themselves to work with the industry funds, and to understand the nuances of what the industry funds need to focus on to meet their regulatory obligations.”