Colonial First State has become the first retail super provider to be granted MySuper authorisation and is set to launch a new MySuper product for employers of small to medium businesses based on the life stages of their members.
Following their approval by the Australian Prudential Regulation Authority (APRA), later this year Colonial First State will launch the new product for its FirstChoice Employer Super members.
FirstChoice's platform tends to focus on the choice super market, with only $7 billion in the default option out of a total of $58 billion under management.
However, the firm believes it is necessary for retail funds to operate in this space in order to be sustainable.
"To be successful in superannuation you need to have presence in all channels, starting at the default with MySuper, to the choice segment and then to the post-retirement segment," Colonial First State's general manager of product and investments, Peter Chun, told InvestorDaily.
Yet, instead of basing their MySuper product on a single fund, Colonial First State has chosen to invest based on the life stages of its members.
"In terms of going forward [in our] investment strategy, we have gone down the path of offering life-stage funds," Mr Chun said.
The firm sees this as a better way to comply with the legislation.
"Typically what the rest of the industry seems to be doing is re-labelling their balance fund as one single investment strategy," he said.
"We decided it is in members' best interests to move to a more cohort-type approach to actually recognise that members' investment needs differ over time."
