While lines between the traditional offerings of superannuation funds and the advice sector are starting to blur, a panel told Money Management and Super Review’s Future of Wealth Management conference that there are still fundamental differences, but platforms will face challenges as funds become more sophisticated.
The fundamental difference today, according to global pension and retirement leader at EY, Joseph Pilger, is that wealth platforms act as a “push business” to win customers while super funds act as a pull model.
“And there’s a massive difference in terms of alignment,” said Pilger.
Andrew Alcock, CEO of HUB24, said consumerism was driving personalisation and the need for knowledge, increasing advice models in the super sector, but every customer-base was different.
Alcock conceded it was a “free market” at the moment, but the cost models of super funds and platforms were certainly different, the trends and tailoring were different and the use of artificial intelligence to make a real difference was different.
Russell Mason, partner, consulting at Deloitte, said while there was a difference today, the industry funds were not to be underestimated, and they were becoming “increasingly sophisticated”, enough so to challenge platforms.
Mason warned platforms to “watch industry funds”, and while he noted they were currently restricted by services providers and had “one hand tied behind their back by the sole purpose test”, platforms should treat them as a strong competitor.
“Funds have a wealth of data and their data specialists will mine the data to better understand the members,” he said.
Alcock pointed to transparency as a great advantage of platforms, highlighting managed accounts specifically as an effective, transparent tool for clients that super funds did not offer, but Mason quickly countered by indicating that while industry funds have a long way to go, they’re dealing with a mass market, and their administrators are still coming to grips with what they can offer.
“HUB24 fulfil a great need, likewise the industry funds. They have different needs for different people, and if the consumer comes out a winner then that’s a great thing,” said Mason.