Financial advisers are routinely switching new clients into the superannuation funds they find easiest to deal with, and fund efficiency now matters more to that decision than investment performance or fees, according to CoreData research consultant Alana Devitt. 

“Often, in the advisers’ interest, the first thing they do when they first take on a new client is switch a client into the super fund that’s their ideal super fund of choice in terms of efficiency, easy to work with, good online portals for advisers,” Devitt said. “It means that they’re able to better serve that client with the least amount of hours, which is what a lot of the financial advice practices are trying to do right now.” 

New CoreData research shows advised members are over-represented among those considering a switch. Members considering a move are more likely to use a financial adviser than the member base overall, at 58 per cent versus 39 per cent. They are also younger, averaging 39 years against 47, and more likely to work full-time (81 per cent versus 64 per cent). 

The leading reasons members give for switching are a desire for greater control (28 per cent) and unhappiness with fees (23 per cent). 

Devitt said the traditional points of difference between large funds had narrowed under regulatory pressure, leaving service quality to carry more weight. Performance across the top funds had largely consolidated and fees generally sat within a similar range, she said. 

“That aspect of differentiation in terms of investment performance and fees, it’s not as big as it used to be a few years ago,” Devitt said. “So advisers, while they keep that in mind, are also keeping in mind the best ways that they can service their clients, and that means having your receptionist or your admin person spend all day trying to get through on the phone to a super fund is just not very efficient.” 

“Where the opportunity lies is actually for the super funds in making sure they have really good partnerships with financial advisers, because what happens is the financial advisers will advise their clients to go with super funds that they have a good relationship with, that they have an easy portal that they can use.” 

Advice is also the service members most want their fund to provide. Retirement planning and financial advice topped the list of expanded services in the CoreData research, with 37 per cent of members saying they would definitely use them if offered. Superannuation guidance drew 34 per cent, insurance 29 per cent and retirement living support 26 per cent. 

“For members, it’s really a case of it’s not so much that they want just updates here, content,” Devitt said. “They really want that personalised education that comes from their situation and is personalised in that sense, and is actually free guidance.”