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'Big four' super funds on the horizon

'Big four' super funds on the horizon

Tim Stewart
— 1 minute read

Almost half of superannuation trustees believe their sector will become as consolidated as the banking industry within the next decade, a new report has found.

Forty per cent of the super trustees and executives surveyed by BNP Paribas Securities Services/AIST said they were concerned about the emergence of a 'big four' in the super industry.

The report, titled 2025: What will the Superannuation Industry look like in a decade?, was unveiled at the Conference of Major Superannuation Funds on the Gold Coast yesterday.

Presenting the report to conference delegates, BNP Paribas Securities Services head of corporate affairs Guy McKanna said super funds must differentiate themselves in response to the consolidation trend.

“From the research it was obvious that it's up to all [super funds] to differentiate, to really provide a service that solves members' issues and differentiates you from the fund next to you,” Mr McKanna said.

As well as expressing concerns about industry rationalisation, some survey respondents also suggested super funds should employ a 'futurist' on their boards to prepare for technological change, Mr McKanna said.

“Some of the things that we know are going to come are 'Google Bank' and 'Amazon Bank',” he said.

Some superannuation funds are already looking at offering home loans, and others are investigating credit cards, Mr McKanna added.

'Personalisation' for individual members is the next big challenge for super funds during the coming decade, he said.

On the topic of insourcing, almost two-thirds of respondents to the survey expect super funds to bring more asset management and related services in-house by 2025.

Only 26 per cent of respondents said they do not expect any increase in internalisation in the Australian super industry.

Commenting on the figures, BNP Paribas Securities Services relationship manager Jayne Ker said asset management is not the only function super funds are considering insourcing.

“[They're looking at insourcing] member advice, IT and software platforms, and more general administration such as marketing, legal, accounting functions.

“What we're expecting to see is much more of those things going in-house,” Ms Ker said.

 

'Big four' super funds on the horizon
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