Asgard master trust members will become the first to be able to use their super to invest directly in the shares of their Australian Stock Exchange (ASX) 300 listed employers, in a move that will help the master trust capture even more employer super outsourcing business.
Asgard head of product Mike Fielding says the step will lead to some St George bank employees being allowed to invest in the bank’s shares directly through their super if they want to, following St George’s decision to outsource its $250 million corporate super fund and to allow non-union members to invest in the Asgard master trust from July.
Fielding adds that two other ASX listed employers are considering moving their employees into the master trust because it will allow them to invest in the employers’ shares.
Asgard recently made several changes to its separately managed account product, which included dropping administration and brokerage fees, and increasing the number of managers on its list from five to 12.
Direct share ownership is also allowed for those who want to control their own investments and don’t want to pay managed investment fees. Asgard has increased the number of shares that can be invested in from 100 to 300, and will also consider shares outside the ASX 300.
Fielding says employees wanting to choose their own investments would normally have to establish a do-it-yourself fund and either forgo group life insurance and other benefits or maintain two super funds.
He says the new offering will not be appropriate for the great majority of master trust members, but he does believe that the option should be offered to those who want to take it up.
Unlike the situation in the US, where the default option is an investment in the employer’s stock, Asgard members have to specifically elect to take up the direct shares investment option. They are also limited to having less than $10,000 or 30 per cent of the total value of their account in one counter.
Fielding believes that smaller to medium-sized employers, rather than the Top 100 companies, will be most interested in Asgard’s offering when they consider outsourcing their super funds or moving out of their existing master trust.
