Advice / APAC / Licensees / Superannuation/pensions

2022 Licensee Research: Advice and retirement income solutions for members

One of the biggest challenges facing super funds as Australia’s population ages and as more people start to move into retirement, is how to deliver great retirement income solutions to those members

Clearly, financial advice has a big part to play in delivering really good outcomes for super fund members.

But here, the funds face a dilemma: do they build an advice capability in-house, which can be costly and time-consuming; or do they outsource it to third-party partners and suppliers?

If they take the external route, then new research from CoreData suggests there’s a few things they’ll need to think about.

Most obviously, super funds have a lot of members. And a growing number of those members are potentially going to be consumers of financial advice.

But CoreData’s 2022 Licensee Research reveals that as the pool of financial advisers continues to dry up – and it’s shrunk from about 28,000 advisers at the end of 2018 to around 17,000 today – the profession’s capacity to take on new clients is declining.

The Licensee Research shows that irrespective of the size of an adviser’s practice – whether it’s Micro, Small, Medium or Large – advisers have, on average, about 150 clients each and that’s considered to be close to, or at, full capacity.

Click to enlarge

So any super fund hoping to be able to refer thousands of members to external advice providers needs to consider that they may run into supply issues. 

And that’s why it’s important for super funds to really know whether licensees are able to support advisers to develop their businesses, introduce efficiencies and grow.

But as you can see from this chart, four elements of licensee offers that advisers are least satisfied with all relate to services and support to help improve the performance of advice practices. 

Click to enlarge

And to make matters worse, only about a quarter of advisers say their licensee has done anything specific in the past 12 months to help them grow their business.

And less than half number – about 11 per cent – say their licensee has done anything to help them with generating new income streams.

Click to enlarge

So clearly, there’s a lot of room for improvement by all licensees in supporting advisers in this respect, and it’s an issue any super fund should explore carefully before committing to an advice relationship with a licensee.

The CoreData 2022 Licensee Research reveals much more about the relationships advisers have with their licencees, and how happy they are. If you want to know more about the research and how it’s put together, please get in touch.

Leave a Reply

Your email address will not be published.