The Association of Superannuation Funds of Australia (ASFA) expects competition in the superannuation industry will be largely played out through financial advisers as the industry continues to consolidate and regulatory reform takes effect.
"I think the big changes will be in advice," ASFA chief executive Pauline Vamos said yesterday at the Finsia Financial Services Conference 2011.
"Advice will be the name of the game. From simple scenario to retirement planning advice, either way, funds will capture and retain their members [through advice]."
Vamos also said the various parts of the financial services industry would come to work more closely together over the coming years.
"The circles - the banking, the financial planning, the insurance and the super circles - will interlock in a much bigger way," she said.
"I think of the way a lot of funds are in-sourcing their funds management; they'll need the expertise of the funds management industry. The average fund will provide advice and will need their own advisers. So I think the integration of those professions into the super industry will be an enormous opportunity."
Vamos was asked by Finsia to provide a preview on how the industry would change over the next five years, particularly as a result of the legislative reviews and changes.
She said she also expected the current consolidation among funds would continue.
"We've got about 286 funds at the moment; these are APRA (Australian Prudential Regulation Authority) regulated. I think in the next five years we may see that go to 150," she said.
The self-managed superannuation fund (SMSF) sector, on the other hand, would experience slower growth, she said.
"I think we will have a decrease in the growth of the SMSF sector. There are two factors in that: the move in the accountant's exemption, and the way in which superannuation funds will really back up their platforms and will allow do-it-yourself and take on trustee duties," she said.
The government announced in April last year that it would withdraw the accountant's exemption that allows accountants to provide advice on the establishment of SMSFs.
