Still a place for niche super funds

With a further flurry of superannuation merger activity expected this year and the onset of more mega funds, the Australian Institute of Superannuation Trustees (AIST) hopes niche funds will still exist.

AIST chief executive, Eva Scheerlinck, said there would likely be six mega superannuation funds with over $100 billion in funds under management by the end of the year.

“At last count there was still 156 APRA [Australian Prudential Regulation Authority] regulated funds. I would certainly like to see some of the niche funds that exist in industry at the moment continue to thrive and bring about great results for their members,” she said.

“I would hate for the superannuation industry to end up looking like the bank sector where there is not a great deal of product differentiation or service level differentiation between funds and I think there's absolutely a space for funds that are targeting specific those cohorts.”

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Scheerlinck noted it took a lot of additional resources for funds to merge which was quite tiring and time consuming but that it was not distracting for funds.

“The teams that are working on mergers do require special resourcing and incredibly good planning. But there have been so many mergers in the industry over the years and they've been speeding up in the last couple of years,” she said.

“There are some really good frameworks that are in place at the moment the majority of funds that are going through mergers divert some of their staffing to be on the merger project team and take them away from what might have been their business-as-usual roles.

“I wouldn't call it distracting but an additional piece of work as resourcing needs to be found and worked through.”