The Traditional Service Model
One major failing of the financial services industry around super is the delivery of an individual service model targeting the optimisation of your balance at your point of retirement. The financial services industry is broadly operating with a tarnished brand while the government tries to prove yet again that the latest regulatory examination of super is the solution to the problem.
The one obvious problem not being discussed involves a commercial examination of the difference between a sales model and then a service model. The obvious problem with super is around what services are actually being delivered. The value being delivered is very much dependent upon the quality of the servicing.
Optional Commercial Models
As a consequence of the heavier penalties being inflicted across the financial services industry for any departure from regulation, the whole industry has become compliance focused, a distraction from explaining the value they bring to market through the delivery of service.
The current approach from product providers delivers a highly important service but very little by way of personal advice required to manage your super as a personal asset. Their definition of servicing has never included the delivery of personal advice at an individual level to optimise your balance and therefore your projected income in retirement.
Super as a Personal Asset
A sales model defines how your supplier makes a profit from providing personal service. A service model examines the same flow between supplier and client from the viewpoint of value delivered against the cost incurred. From the day anyone commences work and requires a super account, best practice involves the management of the asset being created. Super is a payment made by your employer intended to build an asset that replaces your income once you move on to life after work. Like any other asset, super needs to be managed if it is to be optimised.
The intention of government is always hard to ascertain as political opinion changes from government to government depending on their underlying agenda. In the past, government has said that super is a “community and not a personal asset”. Government has also said that the purpose of super has never been defined and such an initiative is overdue for legislation. A strange statement given the fact that compulsory super was introduced in 1992!
From an ownership point of view, there is no doubt that super is a personal wealth asset, in truth similar to anyone’s salary or wage. If you take an active interest in managing your super, there is also no doubt that you will accumulate a lot more than you can imagine. On the other hand, if you ignore your super for too long, the cost can be equally more than you would imagine.
What Do I Do?
In managing any asset, the object of the game is the increase in its value over time. In examining what to do, there are controlled decisions you can make and then there are market forces you can try to manage. In other words there are elements you can control and then there are events you cannot predict.
| Decisions You Can Make | |||
|---|---|---|---|
| Product Choice | Contribution Strategy | Investment Strategy | Level Of Insurance |
| Goals & Objectives Which Can Be Set | |||
| Age of retirement | Projected income in retirement | Milestone 1 | Milestone 2 |
| Monitor the Performance of Your Asset | |||
| Against your milestones | Compare your investment return | Check your contributions | Consider new product options |
Using SuperWiser
SuperWiser provides assistance with product choice, the importance of optimising your contribution, recommendations on investment strategy including timely updates when required, and will also help with your understanding of personal insurance.
The SuperWiser application is targeted to servicing individuals accumulating super, even if you have not paid attention to it for some time. SuperWiser has 40 well-known products already analysed within a database so you can examine decisions around your asset while SuperWiser considers the potential choices you could make.
Start by completing a free Super Review. You can then make a fully informed decision on whether to proceed to obtain strategic super advice to improve your situation.
An Exciting Time Ahead For Super
The recent budget presented by the treasurer really should have minimal impact on what you do with your super. The problem as always is there are too many misconceptions and misleading opinions being promoted about super.
The simple fact is that super is just the same as your garden:
The more attention you pay it, the better it grows and the more it grows, the more you love to pay it attention. This is known as asset satisfaction.
Concepts Of Design
SuperWiser has been in development for a long time. It is licensed to operate under AXIS Financial Group Pty Ltd (AFSL 233680). The challenge in development has been creating an application that can cope with the regulatory complexities of super. It must be capable of:
- Understanding the user’s circumstances.
- Considering the appropriate advice through the principles of active servicing.
- Having a definition of what represents the perfectly serviced super account.
- Ensuring the user is given a method to understand their super goals & objectives and then the ability to monitor the asset’s approach towards those goals and objectives.
- The user must feel more educated by proceeding through the SuperWiser advisory process and therefore more in control.
Future developments of SuperWiser are in the pipeline:
- The application has to be able to recalculate super products for existing users each year to ensure their current product is still the right one for them.
- The application has to notify users when they should next adjust their strategy, possibly based upon a change in circumstance, legislation or in fact the next market cycle.
- While the existence of appropriate insurance is a secondary consideration, an insurance calculator and quotations software would be beneficial.
Benefits Of The Service
SuperWiser has a significant product base and an ability to know more about super than you do. If your main source of information is the media or if your understanding of super is limited to a single item such as investment returns, your choice and management of the product is more likely to be reducing your end result than optimising it.
If your sources are online or possibly product aligned, again you are not approaching the exercise of optimising your super properly. Sophisticated marketing and sales techniques are very persuasive nowadays. The byword in the financial services industry at present is digital marketing which is perceived by providers as a service.
SuperWiser is plain and simple and affordable. The cost of full personal scaled advice is $220 (inc GST) and the application takes you all the way through from thinking about it to the implementation of whatever is recommended to you.
Lots Of Questions
SuperWiser has to get to know you to provide the right advice. Which means you’ll need to provide us with some accurate data around your current arrangement.
For the public user, there are three calculations performed by SuperWiser to prove you can make significantly more super. All of these calculations are conducted to progressively tailor the personal advice to your situation. The initial comparison between your current and proposed strategies are presented by asking as few questions as possible. The next calculation confirms consistency with the result depicted by the first calculation. The final calculation confirms everything before you can choose to pay and go ahead with implementation.
The information required only makes SuperWiser all the more credible. Your information is also secure as every measure has been taken not only to secure the data but even to test the measures as applied.
Watch Your Super Grow
One of the features of the application is in establishing goals and objectives for your super, then understanding parameters of performance and then some medium term milestones. The provision of advice is not a one off exercise to be done and then set and forget. SuperWiser will explain what you need to do to progress towards your long term goals and SuperWiser will then tell you your next two milestones. Markets do fluctuate and one is always looking to the future with the past in mind.
When you should have achieved a future milestone, SuperWiser will contact you and examine what has happened in the time between advice and milestone. SuperWiser will further educate you as to what has happened and what it means to you.
As previously stated, everything develops positively if you pay it enough attention. Perhaps you have been somewhat negligent around your super up until now. It’s ok. Better to start paying attention now rather than years from now.
Start your free Super Review today. You may find your current super strategy is already optimal, but, then again, you may not.
Life In Regret?
Many of us will collect at least a few regrets over the course of our lives. When it comes to superannuation, a common misstep is failing to develop good habits early and not taking the time to figure out what outcomes represent success.
The majority of people under the age of fifty are either misinformed or misled by published opinion about what is good and what is bad in super. Super is at the centre of a lot of activity and opinion, making it confusing to try to navigate. Most people simply switch off and miss out on the benefit of becoming informed about super.
The Professional Opinion
The financial services industry has established itself to “service” what was always going to be an enormous asset almost thirty years after compulsory super was introduced. The annual cost of such services has been widely publicised from time to time, always within a negative context. At no time has anyone tried to explain the relative value of the services delivered against the costs as charged.
For the first thirty years, the main services delivered to the general public have been product based, and then individual services have been developed to target the top end of the market where holistic financial planning can be delivered. It’s easy then to conclude that the most significant achievement by the financial services market is the creation of a product that records all the transactions required to calculate your balance, whilst the financial services industry largely concentrated on delivering highly priced services to financial planning clients.
The New World
In the midst of all the controversy around super, the governing forces, as well as the public, tend to miss what might be the obvious.
Where do those who do not want and cannot afford highly priced financial planning services go to find out how best to manage their super? Most importantly, how can they be assured the source is credible and provides value?
It seems I have just defined the basis of what is the new world for super: the delivery of personal scaled advice at a very affordable price!
The Development Of SuperWiser
As an application, SuperWiser has been in development for over 5 years and at times, progress was slow, partly because of the complication of super regulation. Services of an advisory nature have focused on financial planning and therefore so has regulation. Years of re-regulation of super have only further complicated the basis of advice.
While SuperWiser has not been approved by ASIC, the application has been demonstrated to ASIC in 2020 and all questions responded to fully.
SuperWiser has been examined and re-examined from many perspectives, be it from an actuarial perspective or by advisers or by compliance. It has also been demonstrated on many occasions and positive feedback received.
All of the above is before being further presented to market in delivering what is regarded as an ambitious but essential service.
The Functionality Of SuperWiser
Within the underlying database supporting client outcomes, there is a significant analysis of some forty major products across three service models with all subsequent comparisons based upon a standard algorithm as developed by Actuaries in Super (AIS). So SuperWiser does two very complicated procedures extremely well:
- As a product comparator.
- How to best use the recommended product.
The majority of people do need technical assistance in managing their super as it is a very changeable industry with many available products, all of whom market themselves very well but not in a way that helps the general public make a decision.
Once you have chosen your product, there are a number of additional decisions to be made around goals and objectives, your level of contribution and then how you might invest your asset dependent upon your personal circumstances.
SuperWiser makes all of the above as simple as can be.
The Value Of SuperWiser Service
From a client’s point of view, examination of the service as delivered is rather straightforward as you want a high financial benefit against what you consider to be a low cost.
The fact is that SuperWiser delivers to client expectations between what would be regarded as high value against a low cost. It is expected that news will travel fast as people become more and more aware of this accessible online service. The application does all of the work but there is an internal support staff here and ready to assist you wherever necessary.
Try It Today
Get started with a free Super Review.
If you have any queries in reading this article or in examining the SuperWiser website, feel free to email me at harry.burke@supersimpler.com.au.
Serious Opinions
Everyone has an opinion about super and most of what is said is never good. In spite of that, surely everyone can acknowledge the fact that progressively Australia has built up a huge saving pool that is the envy of the developed world.
As a simple measure of what has been created and assuming we have close to $3 trillion in super spread over 12 million workers we have an average balance of $200,000 approximately.
Why Ignore Your Super?
Evidence suggests that all generations have persisted in not paying attention to their super soon enough. Our personal mismanagement of this serious asset will most likely cost every individual in Australia more than $100,000 of what they could have had with minimum effort when they originally started to work.
Most people start to pay more attention to their super in mid-life and even then they continuously struggle to know what to do with it. The overall super system and then the misinformation that occurs makes it so difficult to know what to do.
The base rationale around super seems to be that everyone involved in its management wants to make it as complicated and contested as possible. Arguably with the technology we have available, things should be a lot simpler but then there are so many vested interests in examining and managing your asset that maybe no one really wants the public to be either educated or informed.
Working Super To Your Advantage
To understand how best to manage your super, you would need an enormous amount of information in analysing the best options around product and then investment choice. There is a plethora of products available and every product makes promises around their service and their value. In essence, most working Australians are given a one size fits all solution.
If you had access to an online service which has the product analysis for you and has the ability to compare different solutions in informing you what is the best decision for your super, would you want to examine your past decisions and whether or not you have been super wise?
Personal Scaled Advice
This is a service not promoted by the bigger players in the market because it is not a high enough margin for them. They all have a strong preference for delivering holistic financial planning. Even the regulations as developed by government fail to take account of which rules should apply for personal scaled advice as a truly affordable option.
As a result, the rules for holistic financial planning are applied to anyone delivering holistic financial advice.
The Definition Of Personal Scaled Advice
This is sometimes referred to as limited advice. It is significantly less expensive than holistic financial planning because personal scaled advice can provide a valuable service which limits the advice to your super account as distinct from your whole financial situation.
The benefit of personal scaled advice can be enormous as all products present a proposition which in some ways is less than transparent. Any adviser presenting their service around individual super must possess certain skills around legislative knowledge, product expertise and then capability around asset management, in particular portfolio construction appropriate to the next two year market cycle. If approached on a manual basis, any adviser will know they have limited capacity to deal with their client base, peaking out somewhere around 1500 appointments a year. That assumes they have the appropriate resources in terms of support staff and processes.
From a client viewpoint, they will obtain valuable information about product choice around cost and functionality, contribution advice and then ongoing investment advice. If established correctly the client will know their goals and objectives, the parameters of performance and then their next two milestones, a definitive feature to monitor progress and even evaluate the performance of the advice as delivered.
Technology
The world has gone a long way in such a short time as far as the potential of technology goes. All product providers do present a service but it is a product service and not a personal service. So product providers have all developed a historical record of transactions against your super and therefore whatever your balance is at any point in time. While they all boast they will either optimise or maximise super, they do not have either the service passion or even the intention to be truly market competitive on service and value delivered.
SuperWiser has been developed to concentrate on service and does so because of its design and the fact that it is available 24/7 online. Features included in the design are:
- Maintained controls around anything limited by legislation.
- Appropriate product data for 40 different product offerings.
- Comparison between your current strategy versus an improved strategy.
- Contribution advice.
- Investment portfolios for a range of portfolios suitable for the next market cycle.
- All documentation as required by law.
- Information to help you monitor your super’s performance against your goals and objectives.
- An implementation guidance service.
- All for the affordable price of $220 (inc GST).
The service from SuperWiser does not stop there as there is no ongoing service fee but there is a system that assists you in monitoring your super once we have helped you establish what you are trying to achieve. SuperWiser will make contact with you when appropriate to adjust your strategy.
Contact Us To Discuss
Check out the SuperWiser website or call us with your questions on 1800 467 467.