Pandemic puts the focus on super

One in two Aussies surveyed by KPMG say they are now more aware of their superannuation balances since the Covid-19 crisis began.

More than half (57%) of the 2500 people surveyed said they needed to review their investments in super, and nearly half said they had had their savings and retirement plans interrupted by the pandemic. Super members are also demanding more from their funds in term of offerings. More than 70% said they expected greater flexibility in products and services on offer while a majority wanted better service and value for money.

Linda Elkins, head of asset and wealth management at KPMG, says super funds do need to increase engagement with members. “Nearly two-thirds expected to be able to deal with their super provider wholly digitally and this is an area which many funds are addressing, but they need to focus on operational improvements even more to meet expectations,” she says.

“A majority said financial advice from their super provider was important, but only a third were willing to pay for it, so this leaves funds in a difficult position at a time when there are liquidity challenges, falling investment returns and early access withdrawals.

“These pressures, combined with heavier regulatory demands, will increase the likelihood of more fund mergers to achieve greater scale.”

Tim Thomas, partner at KPMG financial services strategy, says a community focus on improving the affordability and accessibility of financial advice presents a big opportunity for advice organisations. He says these organisations must respond to customers’ shift in mindset to engage financial planners through a hybrid of face-to-face and digital interactions, and this “should go some part to reducing the cost of advice delivery without compromising on its quality”.