The Australian retirement landscape is currently experiencing a significant shift. The retirement income covenant is now in effect, and superannuation funds are introducing innovative income products at an unprecedented rate. However, a crucial challenge for financial advisers and superannuation funds is the noticeable gap between retirees' expressed preferences and their actual purchasing decisions, which has never been more pronounced.
While the superannuation market has surpassed $4.1 trillion and consumer inquiries about financial advice have grown 16% year-over-year, overall advice penetration has remained steady at 10.4% in 2025. As the profession tries to serve the millions of Australians actively seeking retirement planning support, data from the 2025 Australian Financial Advice Landscape Report reveals a fundamental shift in adviser priorities that superannuation funds need to consider actively. For advisers focused on retiree clients, adviser experience has become the paramount driver of satisfaction (97% correlation with NPS) with the superannuation products they recommend. In contrast, client experience drops to fifth place – a complete inversion from accumulator-focused advisers.
Understanding the Adviser's Dilemma
The transition from accumulation to decumulation is not just a regulatory change; it's a fundamental rethinking of retirement planning. This shift is creating distinct adviser segments with significantly different needs, a change that superannuation funds need to be aware of and adapt to.
The 2025 Adviser Ratings Landscape Report data reveals that retiree-focused advisers show remarkably low price sensitivity (37% correlation with NPS) compared to their accumulator-focused peers (67% correlation) – a 30 percentage point gap that represents the most significant variance across all measured drivers.
Added to this, for advisers, retirement income products present both a philosophical and practical challenge. The 2025 data shows that platform-based superannuation funds dominate adviser satisfaction, with Platform Super Fund leading with an average NPS of 44.5, while industry funds average -15.2 NPS, a nearly 60-point gap, despite the two most recommended super funds being Industry funds. This reflects fundamental differences in how funds approach adviser support, which becomes more important in retirement. To reinforce this point, this satisfaction in adviser thinking is supported by the fund flow data. ProductRex modelling shows Platform Super with $15 billion in modelled inflows, while industry funds face $5 billion in outflow intentions despite being regularly recommended by advisers. The correlation between adviser satisfaction and fund flows (0.78) demonstrates that service quality now trumps size in adviser decision-making, particularly when supporting clients in retirement.
To further emphasise this point, what drives adviser satisfaction with superannuation funds looks very different in the retirement space. Overall performance (a cumulative rating of the overall experience of working with a fund) ranks as the #3 driver for retiree-focused advisers (94% correlation to NPS score), compared to #6 for accumulator-focused advisers, reflecting the direct impact efficiency and ability to support clients has on retiree clients.
The Business Case for Income Certainty
Forward-thinking practices are discovering that retirement income planning, done properly, enhances rather than diminishes their value proposition. The segmentation data reveals why: retiree-focused advisers prioritise sophisticated functionality and adviser support over cost considerations, recognising that complex retirement needs require robust tools and expertise.
Successful practices are adopting a compartmentalisation approach that supports clients' retirement income needs:
- Reserve compartment: Short-term needs with zero market risk
- Lifestyle compartment: Balancing income certainty with long-term growth
- Future goals compartment: Excess funds for discretionary objectives
This framework transforms the conversation from "either/or" to "how much of each," aligning perfectly with supporting clients to have peace of mind with their income needs through retirement.
And this is where Industry funds should have a strategic advantage in terms of delivering income certainty. The Retirement Income Covenants requirement to provide income certainty products, as well as their ability through scale to manage large illiquid pools of money, positions them well to better support income certainty over the life of retiree members.
The challenge is that when a retiree with a $500,000 retirement account moves 30% into a guaranteed income product, that's $150,000 they no longer have liquid access to. Given that retiree clients understand that their assets to support them through retirement are finite, giving up access to this amount of capital, even if it is generating ongoing income through retirement, is challenging to get their heads around. They require sophisticated tools to model scenarios to help clients understand the risks associated with retirement income and the tradeoffs between sleeping at night and having enough to live on.
Other major players are also responding aggressively to these shifting dynamics, with just this week, MLC announcing a partnership with TAL and Challenger to launch MLC Retirement Boost. This signals the retail sector's commitment to solving what they call the 'decumulation puzzle', including a support program to upskill advisers. This commitment should make you feel optimistic about the future of retirement income planning.
So when we dig into the data for retirement focused adviser, the platform advantage in retirement starts to show a significant gap, despite even industry funds innovating in the retirement incomes space, such as Brighter Super's collaboration with TAL targets the "forgotten middle" – those who won't qualify for the full Age Pension but haven't accumulated enough for a comfortable retirement. Platform providers achieve 43% higher ratings in adviser experience compared to industry funds, with particularly strong performance in functionality and investment options, precisely the capabilities needed for sophisticated retirement income strategies. Platform functionality ratings reflect decades of investment in adviser-centric design, something industry funds are now trying to catch up on.
As an example, Aware Super's digital 'My Retirement Planner' has delivered 68,000 Statements of Advice in just 20 months, with over 12% of eligible members aged 45+ actively engaging, far surpassing industry expectations. Further, industry funds collectively employ over 600 advisers and digital advice engagement rates reaching 8-12% annually, the message is clear: retirement income is no longer an afterthought but a strategic imperative.
Practical Implementation Strategies
For superannuation funds looking to make headway in retirement outcomes for members, the 2025 data provides clear guidance on how leading practices are adapting to serve their retirement-focused clients:
- Leverage Platform Excellence The data shows platforms consistently outperform in areas critical to retirement planning. Practices are selecting superannuation funds for retiree clients based on their retirement-specific capabilities, not just where they may have won with accumulation features. With platform providers maintaining a 1.3-point advantage in adviser experience, this choice significantly impacts practice efficiency.
- Embrace the Price-Value Equation The low price sensitivity among retiree-focused advisers (37% correlation) indicates clients will pay for quality retirement products. Funds are competing based on the services that provide positive retirement outcomes and sophistication rather than competing on cost. The most successful super funds aren't the cheapest – they're the most effective.
- Invest in Digital Integration With digital advice engagement reaching 12% among eligible members approaching retirement, both advice practices and super funds must integrate digital tools into their service model. This isn't about replacing human advice but augmenting it with efficient, scalable solutions for routine queries and helping clients and members understand the tradeoffs between income certainty and access to retirement funds.
- Build Specialist Expertise The performance priority among retiree advisers (ranked #3 vs #6 for accumulators) demands deep expertise in retirement income strategies. Funds need to invest in education and tools that support sophisticated modelling of income layering, longevity risk, and tax optimisation.
- Select the Right Partners The 60-point NPS gap between fund types isn't just a statistic – it directly reflects areas that impact adviser productivity. Platform providers' systematic advantages in onboarding (40% higher than for industry funds) and ongoing support translate into hours saved on every client interaction through a combination of implementation, annual adjustments, and error minimisation.
The Technology Enabler
The 2025 report reveals how technology amplifies the retirement planning advantage. Platform providers' architectural advantages – built over 20 years of adviser-focused development – create compound benefits in retirement planning. Their superior integration capabilities, sophisticated reporting tools, and seamless workflows become even more valuable when managing complex retirement strategies.
Industry funds, despite employing over 600 advisers collectively, struggle to match platform functionality. The structural challenges they face – systems designed for employer-sponsored bulk enrolments rather than advised, supported clients – create systematic disadvantages that impact retirement planning efficiency.
Leading platforms are developing sophisticated retirement income modules that integrate guaranteed products with traditional investments. These tools can model complex income layering strategies, automate Age Pension calculations, and monitor when to rebalance between secure and growth assets – capabilities that justify the premium pricing retiree-focused advisers are willing to pay.
Looking Ahead
The retirement income revolution is accelerating, driven by regulatory reform, demographic shifts, and evolving adviser capabilities. The DBFO reforms' "New Class of Adviser" framework may reshape the competitive landscape, but the fundamental need for sophisticated retirement planning will only intensify.
For advisers, the path forward is clear. Those serving retiree clients must align themselves with funds that prioritise adviser experience and sophisticated functionality over pure cost competition. The data shows definitively that retiree-focused advisers value these capabilities, and their clients are willing to pay for them.
The segmentation of adviser needs, with such dramatic differences between accumulator and retiree-focused practices, suggests the profession is maturing. Rather than a one-size-fits-all approach, successful practices are specialising and selecting partners that align with their specific client needs.
As the profession adapts to serve Australia's aging population, retirement income planning emerges not as a threat to traditional models but as the next frontier of value creation. The advisers and funds who recognise this shift – who invest in the right platforms, develop specialist expertise and services, and embrace the complexity of retirement planning – won't just survive. They'll thrive in Australia's retirement income revolution, helping millions of Australians navigate the critical transition from wealth accumulation to sustainable retirement income.
The 2025 data makes one thing abundantly clear: in retirement planning, sophistication trumps scale, service beats size, and outcomes matter more than cost. The advisers and superannuation funds that embrace this reality are already winning. The question is: Are you positioned to join them?
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Comments1
"Refused to engage with a $1m client as they insisted on keeping their industry funds. The $1m was for us to apply as it was cash but they had $2.6m in 3 industry funds??? They only wanted us to managed the $1m. My refusal stemmed from our complete inability to work with industry funds. They are inflexible, information impervious, incredibly inefficient, prone to errors and worst of all have policies that prevent us from servicing our clients efficiently and professionally. You can have your industry fund for sure....just my firm and I won't be your adviser. "
Wildcat 16:51 on 16 Jul 25