Super product advice – how we ensure it’s the right fit for you!
Many Australians hold the bulk of their wealth within superannuation, consequently, having the right super fund product can have a significant impact on your ability to achieve your financial goals and maintain your savings during retirement. There are multiple super fund options to consider when determining which is most suitable, as such, many seek professional expert advice of a Financial Advisor to assist them in the decision making process.
The 2018 Financial Services Royal Commission (FSRC) has exposed that there are actually financial advisors that are not providing their clients with appropriate advice in regards to superannuation products, and are therefore not acting in the best interests of their clients.
As discussed in a recent article post ‘What is important to you, is paramount to us!’ written by Kate Rhodes, our team at Accru Wealth Management adopts the Best Interest Duty obligations in all that we do for our clients, from the commencement of the relationship and throughout. These obligations are incorporated when we make recommendations to our clients on superannuation product choice – our recommendations are always formed with the consideration of our clients’ financial circumstances, objectives, and needs, which translates into appropriate product advice.
So how do we ensure our super product advice is appropriate for you?
1. Understanding your Situation and Objectives
First and foremost we analyse our clients’ current financial circumstances, objectives and needs and ensure that we understand them completely as it will guide our recommendation process.
2. Type of Fund
We then consider the different types of super fund options (i.e. industry, retail, public sector or self-managed super fund just to name a few) and compare each to your situation and objectives to determine which option would be most suitable for you. For example, if a client wishes to simplify the management of their super benefits and does not have a large balance (less than $250,000), a self-managed super fund may not be the most appropriate option given the ongoing costs and administrative requirements involved.
3. Due Diligence of Existing Fund and other appropriate super products
We investigate our clients’ existing super fund product and compare its features with their financial circumstances, needs and objectives. It is essential that our research is thorough so we are aware of all aspects of the existing fund, such as any exit/withdrawal costs involved with, or benefits (i.e. insurance) that would be lost upon a rollover/transfer.
We then conduct extensive research on other possible appropriate super products and compare them with each other and the existing fund against various criteria, namely: fees and costs; performance; features; insurance options; and investment choice options. We always compare ‘apples with apples’ – for example, if we were investigating industry super funds, we would compare funds that have similar investment choice options (i.e. a balanced fund compared with a balanced fund), to ensure that the asset allocation of the funds’ underlying investments are similar, thereby allowing a fair assessment.
Certain super funds can provide members/individuals with insurance cover (although trauma insurance is not available through super). We understand the importance of considering our clients’ insurance needs, and accordingly the availability and costs of insurance when making recommendations on super fund choice.
Many large super funds (i.e. industry / retail funds) provide basic insurance cover (called ‘default cover’) automatically upon set up. If we recommend those products to our clients, we ensure that we are at the forefront of increasing insurance cover or cancelling the default cover for those clients that do not require insurance or wish to self-insure. We have an in-house insurance specialist, James Grindrod (although note that we do not have ‘in-house insurance products) who assists our team in providing appropriate insurance advice to our clients.
5. No Conflict of Interest – we are ‘Financial Advisors’, not ‘Product Salesmen’
The team at Accru Wealth Management are not tied to a vertically integrated business nor are we incentivised in any way (monetary or non-monetary) to recommend a particular super product. The superannuation products we recommend are based on its merits and suitability to the specific client, which ensures us to always put the interests of our clients above our own.
6. Our Values
One of our core firm values is “we care about you” – this not only refers to our employees, it also extends to you, our clients. And part of this value, to us, means to always consider your best interests and provide you with high quality and appropriate advice that leaves you in a better position (both financially and personally) than you would’ve otherwise been in. We strive to provide you with the most suitable solutions that assist you to achieve your goals and objectives.
Our team of financial advisors have a wealth of knowledge and experience to help you review your superannuation assets the right way and meet your financial needs and objectives! Please contact one of our Wealth Specialists today for more information alternatively you can complete your details below and we’ll be in touch or give us a call on 03 9835 8200.
DISCLAIMER: GENERAL ADVICE ONLY
The information provided in this blog is general in nature. It has been prepared without taking into account any person’s individual objectives, financial situation or needs.
Before acting on any information in this blog, you should consider its appropriateness to you, having regard to your objectives, financial situation and needs or seek professional advice from a financial advisor.