Economic and social changes are encouraging – or forcing – super funds to become more like umbrellas for their members. Australians trust some super funds far more than their banks, and baby boomers want their employers to help them prepare for retirement by providing financial education. Super funds are rated highest for quality of advice, closely followed by financial advisers, according to Sweeney Research for the Industry Funds Forum and the Australian Institute of Superannuation Trustees (AIST), while banks come in at a poor ninth and the general media last in 12th place.

Combine this with Mercer research in Benefits Outside the Square, which shows that baby boomers are wanting their employers to help them prepare for retirement by providing financial education, and you have an argument for super funds becoming cradle-to-grave ‘umbrella’ organisations. The argument about whether funds should or should not be doing this is irrelevant: the fact is that they are doing it, and some are boldly going where no funds have gone before. They are expanding into areas as diverse as lobbying, mature workforce advocacy, financial advice and insurance – including life, trauma and health – and some are even considering annuities.

Funds-as-umbrellas is now a mainstream topic at peak bodies’ conferences as seen in the agendas of both the AIST and Financial Services Council (FSC, formerly IFSA). At the AIST’s member services’ conference last week in Melbourne, topics included the thin line between education and advice – which drew comments from HESTA, Equipsuper and Sunsuper, among others – and stemming the flow of members to self-managed superannuation funds.

That insurance is a huge growth area for super funds is seen in its elevation to a major issue on the agenda at the annual conference of the FSC this month in Melbourne. The evolving role of trustees as insurance distributors is being addressed by First State Super CEO, Michael Dwyer, and MLC Insurance executive general manager Andrew Hagger. Health, and its impact on insurance, is also high on the major issues agenda for the FSC. At the conference, Paul Gaudin, of My Road to Health, and the CSIRO’s Dr Richard Head will address human genome mapping, wellness partnerships, and emerging challenges and opportunities for the life insurance industry and consumers.

Retirement division grows

AustralianSuper has established a retirement division because members asked for it, says fund CEO, Ian Silk. While the only product offered by the division at present is the AustralianSuper Pension, an account-based pension, the fund is reviewing the division and considering all possibilities including variable annuities, market protection, enhancements to investment options and servicing possibilities, such as better access to information and advice. The response from members has been “very promising”, says Silk, with the AustralianSuper Pension now having 4,540 members and more than $1.1 billion under management. Of those 4,540 members, about 85 per cent were existing members from the accumulation division.

Join the discussion