Speaking on a panel at the 13th Annual Wraps, Platforms & Masterfunds Conference in the Hunter Valley, Colonial First State (CFS) general manager, strategy Scott Durbin said the diversification strategies of the industry funds may ultimately backfire.
“The bigger industry funds are starting to resemble the larger wealth providers in a lot of ways through their diverse service offering,” Mr Durbin said.
As a result of this growth strategy, the public mission statement of the industry funds has become “blurred”, Mr Durbin suggested, putting them in an increasingly “complicated position” in terms of representing “what they actually offer and what they stand for”.
AMP Financial Services head of platform products Adrienne Cochrane agreed with Mr Durbin, arguing that “the industry funds are expanding their services into areas that are perhaps not their skill set”.
However, Kelly Power, head of platforms and insurance at BT Financial Group, said she welcomed the “healthy competition” engendered by the changes to services proffered by the industry funds.
At the same time, Ms Power suggested the larger industry funds do not necessarily pose any threat to the market share enjoyed by the larger retail institutions.
“MySuper has taken a competitive advantage away [from the industry funds] in that they now need to innovate in order to compete,” Ms Power said.
“They are also facing the same challenge we are from the [rise of] self-managed superannuation funds,” she added. “So all this is contributing to a really healthy competitiveness in the sector.”
Asked by moderator Recep Peker of Investment Trends whether any one platform can meet all of an adviser's client needs, Ms Power conceded that it is not possible in the current market and that “industry funds may actually be most suitable for some clients”.
By contrast, Justin Delaney, head of wealth management at Macquarie Adviser Services, said that because Macquarie is a platform provider focused on “administration” rather than “distribution”, industry funds are complimentary to his business.
Indeed, Mr Delaney suggested that, assuming they met all the relevant criteria, it would not be outside the realm of possibility to see an industry fund-administered fund on the Macquarie Wrap platform in the not-too-distant future.
