State Super Financial Services, the advice business owned by SAS Trustee Corporation, will create formal referral arrangements with industry superannuation funds and other institutions to provide ongoing personal advice to more Australians.
Peeyush Gupta, SSFS chair, said the group is actively seeking to partner with superannuation funds in a similar way to the recent deal struck between the $20-billion construction and building industry superannuation fund, Cbus, and the Financial Planning Association.
Under that arrangement, Cbus will provide client referrals to FPA members who meet select professional and location criteria.
Gupta, who co-founded iPac, now owned by AMP, described State Super Financial Services as “an advice business with a superannuation fund bolted on”.
The group, which was established 21 years ago to provide financial planning services to current and former public sector employees and their families, employs 165 financial advisers in four states and has over 51,000 clients. The fund has $13 billion in funds under management, of which 90 per cent of assets are in the decumulation phase.
Part of the group’s growth strategy, Gupta said, was to expand beyond its traditional target market of public servants by forging alliances with third parties.
“We will work with other funds to provide advice to their members and, if they want their members to remain wholly in their fund, we will provide advice around that, subject to meeting the best interest rules,” he said.
“We bring scale, systems and experience.”
He said industry funds were grappling with the rising cost of providing advice to members and need a scalable solution, adding that new advice businesses should not expect to break even in the first three years of operation, given the high cost of licensing, compliance, infrastructure and staff. For example, SSFS recently established a Perth office that employs five financial planners, two business development managers, a general manager and administration staff, but only has a handful of clients so far.
The SSFS model provides the initial consultation at no cost to the consumer, with ongoing advice priced at a maximum of 0.75 per cent of assets under advice.