SUPERANNUATION – THE PLANNING CONVERSATION STARTER

Please read the advice warning below this article.

Superannuation is so much more than a financial product.  It is the start of a ‘strategy conversation’ that can be used to reach into every aspect of a client’s financial life.

Think about it.  If you undertake even the simplest ‘superannuation review’ you will address the following issues:

  • Investment
  • Insurance protection
  • Retirement saving strategies
  • Estate planning.

All of these planning disciplines have broader application outside super as well.  In fact, if you look at the sum of these planning disciplines, you will see it represents a large proportion of what financial planners discuss with clients every day. So in a sense,  superannuation can be regarded as a microcosm of the broader spectrum of financial planning.

So if you are talking to a client who is resistant to super (which is usually based around the preservation rules, i.e. super being locked up), then the conversation can be easily moved to the same or related strategies outside super with something like:

“I understand your concern, so let’s address the preservation issue by looking at the same planning strategies both inside and outside super; and develop a combination  of super / non super strategies, which might include:

  • Retirement saving inside super & shorter term lifestyle saving outside super
  • Combined super & non-super insurance protection
  • Binding Death Benefit Nomination in super with all other estate planning needs outside super.”

This approach does require a strategy mindset, rather than a product mindset.  Once you, the adviser, are across superannuation strategies, you realise that there is so much more to gain, not just in terms of additional revenue, but also in terms of increased client satisfaction and their long term retention.

My view is that the super conversation should be introduced early in the client relationship (i.e. more than just an item on a fact find); and early in your client’s life-cycle.  Many young people are super-resistant because quite apart from the preservation issue above, (a) retirement seems so far into the future and (b) there are more pressing financial needs.  So it is important to have younger clients on the same page early with their approach to superannuation.

For example, an appropriate conversation starter may be the First Home Super Saver Scheme for individuals and couples buying their first home.  Whether or not this particular strategy is ultimately pursued (given its specific terms & conditions) is irrelevant for the purpose of this article.  The point is you have brought it to their attention, and introduced superannuation early as a possible short term saving solution.  You have showed younger clients how superannuation can be used to achieve both short term goals and long term goals; i.e. saving for a home and saving for retirement.

Super Mentor (Superannuation & retirement coaching) for advisers is available at https://garyweigh.com/advice-mentor/

WARNING: The above article about superannuation is for financial advisers only.  It should not be mistaken by other readers for any form of personal or general product advice.  If you are reading this article and you are not a financial adviser, please seek advice from an authorised adviser to suit your particular situation and needs.