How to make MySuper a business opportunity

If corporate super makes up a significant proportion of your advice business you have until 1 October 2013 to convince as many employers and employees as possible to base their investment choices on professional advice. However, all financial planners could look upon the 15 month lead up to MySuper being made compulsory as an opportunity to win clients by convincing them of the benefits of becoming more engaged with their retirement savings.
 

The core issue for anyone providing corporate super advice is how they will be paid for that advice from 1 October 2013 when MySuper becomes compulsory. The Corporate Super Specialist Alliance (CSSA), representing advisers who specialise in the delivery of corporate super advice, has met with Treasury representatives to discuss that very issue.
 

CSSA President and principal of Legan Financial Services Douglas Latto (authorised representative of GWM Financial Services, owned by NAB) said the only advice fee currently provided for in the MySuper legislation is an intra-fund advice fee that forms part of the administration fee. The admin fee will be transparent but not the amount of that charge that constitutes the intra-fund advice cost. The whole super industry is gearing up to add MySuper offerings to their menu of investment options but so far none has publicly stated how much that intra-fund advice fee will be.
 

The fee has to be set by the super fund trustee and cannot be negotiated at workplace level between the adviser, employer and employee. No decision has been made at the moment on whether it will be a percentage or dollar amount but it will be a fixed amount, the same for all members of the MySuper investment option.
 

Latto said the CSSA would be arguing that the intra-fund fee should be transparent and there should be flexibility for it to be negotiated between the adviser, employer and employee – the three people responsible for making decisions about investment choices -- at workplace level.
Meanwhile Latto said his personal view is that advisers in the corporate super area and others should be doing as much work as possible with existing clients between now and 1 October 2013 to ensure as many  as possible are more engaged with their super.
 

“MySuper only applies to default members and the definition of choice going forward is having made an investment decision so we will be talking to as many employers and employees as possible about making their super investment choice by design and not by default,” he said.