Planners key to corporate fund growth

Superannuation research and consultancy firm The Heron Partnership has thrown its weight behind the interests of the planning industry, yesterday warning corporate super funds to cement planner relationships or face declines in business. Heron managing director Chris Butler said funds that did not adopt the approach would face a slow leak of member money, with research showing an increasing portion of new business was staying out of corporate super.

"From the work we have done, it seems that around 25 per cent to 30 per cent of employees coming to a new employer are sticking with the super product they have, notwithstanding the competitiveness of most employer default funds. It is anticipated that the percentage will continue to increase", Butler said.

"On that basis, in 10 years the membership of employer default funds will be about 50 per cent to 60 per cent of what it is today. It is anticipated that the higher proportion of new members will be younger people with minimal balances."

That would lead to funds being forced to increase fees and charges, he said.

To stop this decline, what is needed is improved education and initiatives in place to assist financial planners, in conjunction with employers, retain and grow members and assets in their corporate super funds and therefore help individual employees ensure they are in the best fund for their personal circumstances, he said.

Last month, Heron launched a super fund ratings service for corporate and retail superannuation products, which aims to compete with established research houses Chant West, SuperRatings and Rainmaker for business.