The not-for-profit superannuation sector needs to find new ways to distinguish itself from its competition in the current, rapidly changing environment.
Those were the sentiments of Industry Fund Services chief executive Bill Danaher opening the Industry Super Network’s inaugural Financial Advice in Super Symposium in Melbourne on Monday, adding that the current environment provides a “major opportunity”.
The key points of difference of profit-to-member funds are diminishing as other major players launch new products and develop lower cost delivery channels to capitalise on a major growth opportunity, he said.
“We as a sector are best positioned to provide high quality professional advice delivered to members for a sustainable and affordable retirement,” Mr Danaher said.
“What is the real opportunity here?” he asked. In addressing that question, it’s worth thinking about the typical member and what reforms mean to them, as well as what factors might identify as points of differentiation between the multitude of superannuation funds and financial planning firms, Mr Danaher said.
“Competition is heating up, and gradually our points of difference – such as low fees and no commissions on advice – are diminishing.”
Mr Danaher said the industry fund sector must work to continually change itself and the model it operates under in order to meet the threat from competitors and ensure members are always able to access appropriate and affordable advice.
“We can’t afford to wait for members to find us,” he said. “They must know who we are, where we are and what we offer. The challenge is to adjust the way we do business on multiple fronts.”
This means finding ways to deliver more personalised advice to members without significantly increasing costs, and how to extend its advice network to increase access to advice to members.
The current wave of financial services sector reforms, including Future of Financial Advice (FOFA) changes and Stronger Super, provide a framework but the challenge for the industry is how it builds a competitive advantage within this framework, he said.
