Tasmania-based industry fund Quadrant has 8,000 members and “about $640 million” in funds under management, Mr Davy said recently, adding that under the Stronger Super regime, Australian Prudential Regulation Authority (APRA)-regulated superannuation funds will need to be able to prove to the regulator they have sufficient scale.
“The question is: ‘How do you get those economies [of scale] so you can compete with the bigger players in the market?’” he said.
While merging with another fund is the obvious way to achieve scale, Mr Davy’s fund is taking a different route.
“We’ve got a company called Quadrant First which is a joint venture between ourselves, Vision Super, Statewide Super and Western Financial,” he explained.
Quadrant First will provide five pieces of scaled advice to members of the three superannuation funds from July 1 this year. Quadrant Super also has an investment relationship with Vision Super, he added.
“To be a smaller fund and to exist, we need to work together and get a base so we can continue to be effective and offer really good products,” Mr Davy said.
Quadrant Super has also announced it received MySuper authorisation from APRA earlier this week.
“We’re now into implementation mode. We’ve got a whole new product range from 1 July. Our new MySuper option will also be available from 1 July,” Mr Davy said.
However, he bemoaned the amount of regulatory hoops his fund is currently being forced to jump through.
“There’s just so much regulatory change at the moment,” he said. “The industry’s got to be able to digest the whole thing. It’s too fast at the moment, and it’s too compacted.”
