Retirement benefit projections are set to be on members’ statements within six months, following Provisio’s upgrade to its rapid advice delivery software for clients’ super funds. PHILIPPA YELLAND reports.
Funds such as ESI Super use the Provisio software with an eye on integrating web-based tools intra-fund advice delivered through call centres, says Cameron O’Sullivan, a director of Provisio Technologies. The object-oriented software, developed mostly in Java, can be used either in-the-Cloud or on an intranet, says O’Sullivan. “The smaller funds are opting for the online, hosted in-the-Cloud solution, while the larger funds are going for a more integrated solution on their own intranets.” O’Sullivan says the software is unique in its ability to integrate all advice channels – call centre, web, or face-to-face – with the retirement projections.
Legislation is in the wind compelling funds to include projections about retirement benefits, and the Institute of Actuaries of Australia has criticised funds for little or no reporting of such projections. Some of the limitations of current retirement ‘calculators’ are: • A lack of integration with member websites or software used by the fund’s financial advisers. • The member or adviser cannot interact with the retirement plan. • The determination of retirement income does not always take Centrelink payments into consideration to reduce the amount of pension-drawdown needed in retirement. In the push for funds to provide advice, O’Sullivan observes that very few of the major participants in the advice world are actually choosing to use the Australian Securities and Investments Commission’s intra-fund relief provision provided under Regulatory Guide 200 (RG 200).
(RG 200 gives relief to trustees from having to comply with section 945 of the Corporations Act, by giving guidance on the distinction between factual information, general advice and personal advice in the superannuation context. The guideline gives examples of how advice may be given in circumstances including simulated call centre conversations, emails to funds, and in statements of advice.) One of the reasons is that, in order to qualify for “intra-fund”, the trustee of the super fund has to give the advice, he says. “Very few organisations meet this requirement as most have a third-party advice provider such as their administration entity, outsourced advisers, or just a separate legal entity that was created for the purposes of giving advice,” he says.
For most, this advice was deliberately placed into another entity to protect the trustees, as advice businesses do carry their own share of risk – for example, Storm Financial. “So they are not exactly keen to unwind this decision just to qualify or [provide] intra-fund advice. If the Government really wants intra-fund to be supported, they may need to broaden who it applies to,” he says. As such, most of the industry funds that are using rapid advice are doing so under the same legal regime as advisers operate under – “just with much greater efficiency”, O’Sullivan says. The other reason is that many funds also want the flexibility to offer services not currently under the intra-fund regime, such as transition to retirement and retirement planning. These are proposed under the expansions to intra-fund in the last Federal Budget.