With two mergers in two years, Brighter Super chief executive, Kate Farrar, believes the fund has achieved an “amazing outcome” to become a significant player in the superannuation landscape and continues to hold growth ambitions to reach the $60 billion sweet spot.
In 2021, LGIAsuper and Energy Super merged to create Brighter Super, with Farrar taking the helm after leading LGIASuper for over three years.
On 31 May 2023, it merged with Suncorp Super, now known as SPSL Master Trust, to form a $30 billion super fund with more than a quarter of a million members.
With this, Brighter Super is the second-fastest-growing fund in Australia, as per KPMG Super Insights 2023, recording 56 per cent fund growth. It falls just behind Australian Retirement Trust (ART), which saw 74 per cent fund growth through the merger of QSuper and Sunsuper in 2022.
“It’s been an amazing process and a fantastic job done by the team,” Farrar told Super Review.
“They have undertaken two successor fund transfers and two registry transitions in two years, which is an amazing outcome. We are now the fourth-largest non-government financial services institution in Queensland and have gone from three small funds to a significant player.”
Entirely member-owned, Brighter Super caters to some 250,000 members, who Farrar says have enjoyed a cut in fees and significant expansion of advice offerings through the acquisition of Suncorp Super assets.
Previously, the creation of Brighter Super through the merger of LGIAsuper and Energy Super allowed the fund to take advantage of market conditions that contributed to it having three investment options MySuper, Growth, and Balanced in the top five of the SuperRatings rankings for the first nine months of the financial year to the end of March 2023.
However, in order to enjoy the benefits of scale, Brighter Super has identified $60 billion as an optimal size to deliver consistent results with optimal efficiencies, while still delivering its boutique service to members.
“In order to be able to support all the regulatory change, and technology change in particular, to ensure we deliver what members expect, we felt you needed to have competitive investment, administration fees, and funds under management,” Farrar explained.
“We’ve already gone a long way to delivering on very competitive administration fees and expect to do so again at the start of FY25 when we have absolutely completed the Suncorp Super integration process.”
Until then, the super fund remains open to merger opportunities to reach a “logical number” of around $50–$60 billion, which APRA previously signalled to be the line between small and mid-sized funds.
According to Farrar, a fund with a good cultural fit and shared strategic vision of delivering boutique services at scale will signal the right match for future acquisitions.
“Our unique service proposition is what we call boutique scale, so we want to have advice-led conversations with every member who wants some type of advice,” she said.
“If we could meet with every member face to face, we would, but that’s not scalable. So, we’ve worked hard on our technology interface to optimise its use and communicating those opportunities to members.
“It’s important to us that any prospective merger partner also has that deep connection with members and wants to ensure we don’t grow too far. We don’t believe that, beyond $50– 60 billion, it’s possible to have those personalised experiences with members because your cohorts and segmentation within the member case gets too complicated.”
Expanded advice offerings
Reflecting on the Quality of Advice Review (QAR) that gave super funds the green light to deliver advice, Brighter Super is supportive of the recommendations that will make it simpler and easier to deliver this service to its members.
It already has more than 40 super specialists in-house who are able to offer general to comprehensive advice.
It also has team members who provide intra-fund advice internally and has partnered with Link Advice to provide intra-fund advice for all members.
As a part of the integration with Suncorp Super, the fund was able to launch an adviser portal comprising some 1,200 external financial advisers in mid-June 2023, which members can access and pay for from their superannuation accounts.
Farrar said: “It’s a comprehensive offering and we’re excited with what it will allow us to do for members by prioritising relationships over transactions and allowing members to choose the adviser they want.
“We continue to offer our own in-house advisers and intra-fund advice as a part of the cost of membership and scaled advice if it’s a bit more complicated — it’s a whole suite of advice offerings.”
The CEO saw the QAR’s recommendations as the “last important piece” that will allow people their choice of adviser and still be able to get all the benefits of having an adviser with the super fund.
Given the busy consolidation efforts in the last few years to build the $30 billion fund, Farrar said the first order of business now is to “extract all the benefits” of having brought all these operations together.
“We’re making sure in our investment portfolio, where we brought the two MySuper sets of assets together, that we gain the great performance we expect out of having some liquidity from Suncorp Super MySuper, that we can put to use with what we expect to be some nice and cheap illiquid assets that can fall over time. There’s a big focus on bringing our asset portfolios together,” Farrar said.
“We also want to make sure we have rolled out our Brighter Super operating model across our entire member base, and spend some time, now that everybody is on the single platform, to work further on our member journeys. We have 11 member journeys that are operating and want to ensure they’re fit for purpose and optimised for our new, expanded, and more diverse cohort.”
Like other funds, the fund is increasing its focus on retirement too following the Retirement Income Covenant, Farrar adds.
“Many of our member journeys are focusing on the pathway into retirement, so we will be looking into ensuring the retirement experiences of our members are as good as they can be,” she said.