Members of QSuper who use its new mortgage-advice service will receive half of the broking commission from any deal, one of a growing number of innovative offers from banks and funds fighting for market share.
The rollout through QSuper’s financial advice arm, QInvest, is likely to be of most benefit to those in their 30s and 40s struggling with the financial demands of a growing family and a mortgage.
And it comes at a time of increasingly aggressive value-added offers from self-managed super fund providers and banks – ING’s no-fee offer for super accounts to new and existing banking customers has brought in 4000 new customers and 6000 existing bank customers in six months.
Through the service, QSuper members will be offered a chance to re-mortgage with around a dozen lenders. There is no cost for the service which is run on a not-for-profit basis with all advisers being salaried, revenue being derived from half of the commissions on any deals that are brokered.
“We will be able to rebate half the ongoing commissions to the members and our encouragement is that they apply that against their mortgage and take a year or two off the term,” said Steve Cullen, chief officer of advice at QInvest.
The advice model is part of QSuper’s policy of addressing members’ full financial needs.
“We are very committed to addressing cohorts based on the increased information we have,” said Cullen. “If you are listening to your customers and they are in the family-building stage of life, they would say ‘a really important thing for me right now is my mortgage’.
“So it is about being able to talk to customers about their total financial balance sheets. The difference with a bank is they’re primarily there to understand and drive profits for their shareholders, whereas we think this is a real value add for our members and that it will resonate for them.”
The move follows CoreData’s Post-Retirement Report, which found a striking lack of engagement by members to advice offered by their super funds. Only 10 per cent rely on the financial advice offered by their funds, with most seeking advice from independent financial advisers, aligned advisers or accountants.
Salvador Diaz, head of advice, wealth and super at CoreData Consulting, said: “Super funds need to look at their service offering, outside of investment options and financial advice and broadening out to do what QSuper is doing, in being innovative, in offering mortgage broking.”
The report also found that member engagement could be improved through direct investment options. One fund that has innovated lately in this area is LegalSuper.
After getting approval from APRA, LegalSuper is letting its members increase their member choice investments from 50 per cent of their total assets to 95 per cent.
Andrew Proebstl, chief executive of LegalSuper, said a direct investment option provided more control for members who do not necessarily have the time for the ongoing administration, compliance and personal advice needed in running a self-managed super fund.
“Some of our members say, ‘Rather than the time spent in running an SMSF, I would prefer to have that time available to run my legal practice’. While some have told me they want their Australian equities within their SMSFs, but for global equities they are happy to use our overseas shares, as there is a much bigger universe to select stocks from and they are comfortable with managers we appoint to pick the stock.”