Betashares chief executive officer Alex Vynokur explained that the ETF provider’s recently announced expansion into the superannuation industry will provide some “much needed competition” to a sector heavily weighted towards consolidation.
Speaking with InvestorDaily post the announcement, Mr Vynokur said that preceding the decision to foray into the space, Betashares undertook a careful review of its accomplishments and considered a number of untapped opportunities.
“We are certainly making a meaningful difference in the Australian market already. As you know, today, we’ve got over a million clients. We are managing $30 billion in assets. We’ve built a significant business, and I’m extremely proud of that,” he said.
“But at the same time, looking at statistics and looking at reality in Australia, the largest financial asset for an average Australian outside of their home is their superannuation.”
Describing super as “the pride and joy of our financial system”, Mr Vynokur highlighted that the industry is projected to reach $9 trillion by 2041.
“We certainly have felt, having looked at it carefully enough, is that there is an opportunity for us as a business to bring the same DNA of responsible innovation, client engagement, client education, focus on diversification, and focus on value for money, to bring that same DNA and that same ethos that we have been carrying since the founding of our business into the superannuation industry and help our clients,” he said.
“Some of them will be our existing Betashares clients and some of them will be people that Betashares does not yet serve – help them make better decisions with superannuation and introduce what we think is some much-needed competition as well into our superannuation industry.”
Mr Vynokur explained that in all areas of its business, Betashares prioritises the long-term perspective, which the firm intends to maintain as part of its push into super.
“I can tell you that my focus personally is really on what Betashares looks like in 10 years as opposed to what Betashares looks like in the next quarter or two,” Mr Vynokur said.
“I think superannuation is certainly, the industry, very similar to ETFs, very much similar to investment management, where you do need to take a long-term approach to building a business ... For us, entry into superannuation is part of a very well-considered long-term strategy, to do more and to add more value basically to our clients.”
Mr Vynokur noted that Betashares will be seeking to shift how Australians view their super.
“All of us have a superannuation account who are working Australians, but for a significant portion of our population, in fact, for the vast majority of our population, financial education is nowhere near where it needs to be,” he asserted.
“For a large portion of the Australian population, people just view superannuation as a form of tax. We want to turn the conversation on its head.”
By providing support, education, and encouraging more engagement, Betashares hopes to be able to help Australians make more informed decisions about their super.
Despite its significance, Mr Vynokur assured that the move into super would not harm the firm’s current ETF offering.
“We will continue to invest a significant amount of effort and resources, both time and financial, in building out our ETF suite over the years to come,” he suggested.
“But an ability to engage with the client more holistically and be able to assist them both with their superannuation assets and with assets that they might have invested outside of their super, we think is a very important opportunity but also a very important need in the market.”
While Mr Vynokur declined to forecast Betashares’ potential growth in superannuation, he said it was expected to become “a very meaningful part of the overall business” over time.
Bendigo Superannuation, the super business currently owned by Bendigo and Adelaide Bank, has $1.4 billion in assets and more than 19,000 members.
In its original announcement, Betashares said that its plan to acquire Bendigo Super represents the beginning of a longer-term strategy to expand into the “wider financial services sector”.
Mr Vynokur refrained from disclosing specific details about the firm’s future plans beyond the realm of super, but did confirm that Betashares has “no desire” to move into financial advice
“What we do have a desire to do is assist our financial adviser clients to add value to their clients, basically, and our common clients,” he said.
“And that’s really what’s motivating us, certainly, with superannuation, and that’s what’s motivating us in terms of some of the other areas that we are exploring in terms of broadening our range of services.”
The planned acquisition of Bendigo Super remains subject to regulatory approvals and is expected to be completed in 2024.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.