The push by industry funds into the advice space continues to gain pace with the $630-million Health Industry Plan (HIP) announcing a strategic partnership with Bridges Financial Services.
HIP’s more than 23,000 members will now have access to financial planners who charge on a fee-for-service basis.
Members will receive flexible and scalable, single or multi-issue financial advice, according to an announcement from by the fund this week.
Under the fee structure agreed to with Bridges, the cost of advice will depend on the level of ongoing service a member receives and the complexity of advice provided. Under the deal, HIP members also get a discounted rate on fees.
Bridges has 260 authorised planners nationally and is part of the IOOF group, which provides wealth management advice to more than 700,000 clients around Australia.
To retirement and beyond
The push into advice follows a high-profile trail by industry fund giant AustralianSuper started a year ago. The trial partnership with six financial-advisor groups has tested the feasibility of using retail planners to supplement the existing arrangement in which advisors are licensed through Industry Funds Financial Planning (IFFP).
The panel of advisers includes the NAB-owned Godfrey Pembroke. Under the trial, planners can only charge capped time-based or schedule fees, which can be deducted from their client’s account.
Bill Buttler, director of Price Warner Actuaries, says the growing number of industry fund members who will retire and the increasing size of post-retirement assets is making providing financial advice to members a priority for funds.
The Australian Prudential Regulation Authority Super Trends figures show that assets held by industry fund members over the age of 65 have been growing at five times the overall growth rate of assets under management.
The annual amount of pensions paid out to fund members has also been growing at a similar rate.
Buttler says that by funds working with advisers, they can work to better retain these post-retirement members and stem the continuing flow of members into self-managed super funds (SMSFs).
“If AustralianSuper and its fellow industry funds are to succeed in their bid to retain retiring members, they will need to tap into the pool of aligned dealer groups,” Buttler says.
“That will demand concessions and flexibility from both sides, but ultimately it will be to the benefit of all parties if the partnership is made to work.”
Providing a potential pathway back to the fund for HIP members who have opted for an SMSF is one of the advantages HIP chief executive Ross Bernays sees in partnering with Bridges.