Rest’s national manager of advice delivery, Greg Fleming, speaks to Investment Magazine ahead of his appearance at the Conference of Major Superannuation Funds 2019. He says the royal commission leaves room for super funds to promote the trustworthiness of their advisers.
Q: Why did Rest set up its own advice proposition in 2015?
A: Rest determined that we should provide members with accessible and cost-effective advice on their own terms, to help them understand how to maximise their super and retirement outcomes.
Members now have a choice of how they access advice, and can choose to interact with us in a manner than suits them. We’ve continued to ramp up our advice services over the last year.
Rest members previously received phone-based and face-to-face advice from Link Advice. The fund now has two advice offerings: a digital online solution and a phone-based advice offering.
Q: Why is it important that funds offer financial advice?
A: One of our key beliefs is that everyone should be able to access quality advice – not just people who are already financially well-off – and that getting advice shouldn’t be daunting.
Super can be complex, so it’s important that members can approach their fund to help them understand how to maximise their super and retirement outcomes.
Q: With commissioner Kenneth Hayne addressing concerns about vertical integration – when those with super products also offer financial advice – What risks do super funds need to be aware of?
A: Super funds must be aware of the limits of the financial advice they can and should provide, and also clearly communicate this to members. It’s about being upfront with members about what can and cannot be provided, and acting in their best interests.
Q: While the accumulation phase has been grabbing most of the attention, how important do you think advice is for those nearing or already in retirement?
A: It’s very important. People approaching retirement need help to understand how they are going to meet their income needs, and how to manage the new risks they face, such as sequencing risk, and how long their money will last. Our members can speak to our advisers over the phone for assistance with planning for their retirement.
Q: Do you believe funds have done enough with regards to offering retirement products?
A: We’re always looking for ways to improve our products. There’s a need for funds to balance simplicity and accessibility with the complexity of the products and the existing tax and social security framework.
Q: Has Rest gained more financial advice customers and funds flow in the wake of the royal commission? Can you put a number to it? What about staff? Have you seen an uptick in bank planners wanting to join an industry fund? If so, why might they be attracted to this sector?
A: Our team has dealt with Rest members who’ve approached us following the royal commission looking for advice. Our advisers have been attracted to the Rest culture and the not-for-profit environment we operate in. Our focus is on genuinely looking out for the best interests of members without conflict. For example, our advisers don’t receive any commissions or bonuses.
Q: What is the future of financial advice, given how tarnished the industry is in a post-RC world?
A: The Royal Commission didn’t necessarily tarnish the notion of getting advice, rather it highlighted the importance of getting advice from a trustworthy source. Each institution and adviser will have to thoroughly demonstrate that they and their advice can be trusted.
Q: Finally, can you let me know about any technology that Rest uses in its advice proposition – robo-advice, etc?
A: Rest uses Midwinter’s Advice Operating System, a CRM and advice modelling solution, to help deliver advice to members.
