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Super of the future
By
Christine St Anne
Mon 02 Jun 2008
Most people can recall the advertisements with industry giant Bernie Fraser.
Most people can recall the advertisements with industry giant Bernie Fraser.
Touting the benefits of belonging to a not-for-profit fund, Fraser boldly claimed in his distinctive tone, "It's the super of the future."
At the same time, retail business BT Financial Group was running a series of advertisements that included smartly dressed men and women discussing the benefits of meeting offshore companies face-to-face, with the final outcome better returns to their clients.
According to an advertising trade magazine, Fraser's industry super ads were more effective than BT's ads.
Whether Fraser's message of low-cost super resonated with many people or they identified him with Triple J's loveable character, The Sandman, one may never know, but according to Investor Weekly's James Dunn, a "tantalising twist" has occurred in the industry versus retail versus corporate fund debate.
This month's news analysis looks at the increasing notion that in the future the industry may just be dominated by industry superannuation and self-managed superannuation funds (SMSF). Each sector has experienced considerable growth. According to research firm SuperRatings, out of the top 10 fastest-growing funds, nine were industry and government funds.
SMSFs on the other hand have also experienced exponential growth, with the SMSF Professionals' Association of Australia claiming SMSFs now represent more than a quarter of the value of investments in the superannuation sector.
It's still early days to make a call on what the industry will look like in the future, however, the current market turbulence may indeed pose challenges for all players in the industry.
One of our major news pieces looks at the substantial losses hitting retail platforms on the back of market volatility.
Deputy editor Victoria Young looks at how falling returns have resulted in sliding inflows for Australian wraps, platforms and master funds.
Even advice distribution channels have failed to deliver business, with advice inflows plummeting for each of the major groups.
While these retail firms may be struggling at the moment, industry funds are beginning to pick up some of their offerings, including tailored insurance products and now services specifically targeted to their wealthier members.
Industry Fund Financial Planning has already established a high net worth service, while Equipsuper is the latest industry fund to look at building a private banking-style service.
Chant West's latest research report highlights that public sector and industry funds offer the lowest fees compared with retail funds, including master trusts. If the not-for-profit sector continues to mirror aspects of their retail colleagues, perhaps these fees may eventually edge nearer to the levels of their retail counterparts.
While deliberations continue on the outlook for the industry, philanthropy has been adopted by all parts of the sector.
Victoria Young's cover story looks at the growing commitment by the super industry to this booming sector and its super future.
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