Superannuation funds have failed to solve the problems around access to financial advice, and both members and the funds themselves will suffer until they do, according to Rice Warner.
The research house has struck the superannuation industry for failing to deliver cost-effective financial advice to members approaching retirement and whose financial matters are becoming more complex.
With advisers leaving the planning sector after the fallout from the Hayne Royal Commission and legislative reformsand research showing demand for advice is on the rise, Rice Warner is predicting hikes in the cost of planning.
However, as it outlined in its Financial Advice within Superannuation Funds report this year, the firm notes consumers don't want to pay more than $500 for advice, including comprehensive financial plans.
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As a result, pressure is increasing on superannuation funds, who Rice Warner claims have not yet "been able to marry the needs of members approaching retirement cost-effectively."
With recent advancements in technology, Rice Warner pointed out more tailored, goals-based advice could be provided, with location no longer a factor for clients living in remote areas. Further, scalable advice models reducing the marginal cost of providing advice are also achievable.
Yet, Rice Warner pointed out around a third of super funds still do not have a super projection calculator on their public website.
"Of the funds that do, about one fifth of those redirect the member to ASIC's MoneySmart calculator instead, losing the opportunity to engage their members," Rice Warner said.
It warned the next 12 months pose an opportunity for the super industry to finally begin delivering advice for members approaching retirement at scale.
"Until the industry achieves this, funds will not be able to assist members to achieve a reasonable retirement outcome," the firm said.
"There is a need for funds to develop products and strategies for retirees - if they continue to be reactive; they will lose their share of the growing retiree market."