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Beware of merger fallout
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More detailed analysis is required into the impact of superannuation fund mergers, particularly with respect to the operations of the current administration regime, according to Tasplan chief executive Neil Cassidy.
Cassidy said the detailed analysis was required in circumstances where there had been insufficient discussion around the logistics and inherent dangers involved in industry consolidation.
“In the pursuit of scale, mergers are at the forefront of strategic planning for most trustees, however, the consequences of multiple mergers have the capacity to impact on the custodians, asset consultants, insurers, trustees and administrators,” he said.
Cassidy said that while the Cooper Review had alluded to consolidation in a bid for funds to achieve economies of scale and reduce fees, this overlooked the potential administrative minefield that might result.
“While the recommendations from the Cooper report seems altruistic at first glance, without the necessary framework it leaves the industry uncertain at a time when this is the last image we want to portray to members,” he said.
Cassidy warned that the failure to manage outcomes or the collapse of a service provider would result in untold damage to the industry and all stakeholders.
AUTHOR
Mike Taylor
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