Confirmed: Super fund personal advice fees range from $470 to $4,500

Mike Taylor

Managing Editor and Publisher

6 October 2022

The reason superannuation funds see themselves as a vehicle for the delivery of financial advice is explained by a survey of 19 funds which revealed that fees for full personal advice can range from just $470 to $4,500.

The survey, conducted by the Association of Superannuation Funds of Australia (ASFA) as part of its submission to the Quality of Advice Review (QAR), has not only revealed how the funds approach advice provision, but where it is concentrated.

What it is more, the survey reveals that funds have increasingly sought to take advice provision in-house.

It reveals that all 19 of the funds who participated in the ASFA survey provided general advice, 84% provided intra-fund advice and 60% of funds provided full-service personal advice.

In terms of fees and charges, the survey revealed the minimum fee for scaled advice varied from zero to $1,750, with a median fee of around $350. For full personal advice the minimum fee varied from $470 to $4,500 with a median fee of around $2,500.

It said many funds also support payment of advice fees in relation to advice provided to a member by an external financial advisor.

Interestingly, the survey revealed that superannuation had generally made only modest use of digital or web-based advice, albeit 90% of funds provide a calculator which forecast the retirement balance and/or income for their members.

“Funds make use of a variety of methods to deliver advice. These range from direct provision by an in-house call centre operated by a fund to using a third-party specialised provider of financial advice. In-house advice provision has become more common that outsourced arrangements,” it said.

“There is some use of web-based systems for delivering advice but only 28% of the funds surveyed utilise online tools to generate statements of advice (SOA),” the survey found.

“Funds provide advice to members on a broad range of topics related to the interest of the member in the fund and, in some cases, their broader financial circumstances,” the survey analysis said.

“These range from retirement planning and transition to retirement strategies to decisions about contribution levels, investment choice and insurance coverage. All the funds surveyed provide advice on matters relating to retirement incomes.”

The ASFA analysis said that “in providing advice services to members, the superannuation industry engages a subset of the total universe of financial advisors”.

“Approximately 90% of advisors licensed to provide personal advice can provide advice on superannuation products. However, only a small proportion of these would be directly employed by a superannuation fund.”

“For superannuation funds, there are a number of ways that trustees can structure their advice capacity, through a combination of in-house and outsourced advisors.”

“With respect to the retail sector, the large commercial financial services institutions can have significant networks of financial advisors (often comprising multiple dealer groups). These organisations provide advice services to fund members from multiple funds.”

“Some of Australia’s largest industry and public sector superannuation funds have significant in-house advice capacity. In another form of in-house advice, some funds directly employ advisors that are licensed with other organisations. However, the extent of this practice is difficult to determine as it is not captured in the ASIC data.”

“There is a range of third-party providers in the market. For many organisations that provide services to fund trustees, advice services represent just one of those services. For instance, Mercer has around 40 licensed advisors and Link has approximately 50 licensed advisors. Industry Fund Services is a source of outsourced advice (and other services) for industry funds and has around 110 licensed advisors.”

“Some superannuation funds have combinations of the above models. For example, some funds out-source the provision of comprehensive advice to their members, but retain intra fund advice services in-house.”