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(February-2004) Players look to enter admin web game
The pressure from SuperChoice’s clients to give them a slice of the pie has emerged as the web service further consolidates its position in the non-industry super sector, indicating it is likely to announce two major new clients in the first quarter of 2004.
With a client list of leading super fund administrators such as AMP, AXA, ANZ, Asgard, AM Corporation, the Commonwealth Bank, ING, IOOF, Mercer HRC and Westpac, the importance of the SuperChoice web platform goes some way towards explaining why its clients want to take a stake.
It also goes some way to explaining the dynamics which are currently driving investment in the admin side of super.
Any examination of the super admin sector reinforces the impression that technology has become king and that funds have two choices — manage the administrative and processing functions in-house or outsource the function. Either way, funds or the companies to whom they outsource need technical, computer and web-based grunt,if they want to compete.
UniSuper is one fund which retains administration in-house while upgrading its capabilities with new technology.
UniSuper’s CEO Anne Byrne says with its administration technology now around 20 years old, the fund has recently completed negotiations for a new platform to be implemented early next year.
Byrne says administration is a detail business and is critical to ensuring member satisfaction, so having a robust and stable platform backing the administration function is crucial.
The bottom line confronting most super trustees is that good administration is one of their most costly and challenging obligations requiring technology.
Also driving the equation is the Australian Prudential Regulation Authority (APRA) which has told funds they must have acceptable administrative arrangements in place.
Kurt Groeneveld, managing director of Brisbane-based specialist funds administration software company, Supercorp Australia, says his company has won at least two new clients on the basis of APRA pressure for funds to improve their administrative arrangements.
Groeneveld says much of the growth in the industry is being driven by the consolidation occurring within corporate super and recent legislative changes.
According to SuperChoice director of super services Patrick Martin, the web-based platform has been operating for five years and that over that period, it has been enhanced to meet the specific needs of its client base.
As an example of the extent to which it has been tweaked, SuperChoice recently released its 52nd version which contained 24 enhancements directly reflecting client requirements.
Martin says any new players will need deep pockets and a capacity to loss-lead for a couple of years.
Local Government Superannuation Scheme CEO Brett Westbrook says most industry funds have outsourced their administration.
He argues that the standard of administration in Australia is still lagging world’s best practice. Part of the challenge facing administrators is Australia’s complicated tax regime, which makes it difficult to migrate platforms from other jurisdictions.
While many of Australia’s major institutions have chosen to utilise platforms such as SuperChoice, a number of the major foreign-based institutions have chosen, instead, to customise their platforms to meet the needs of the Australian environment.
A case in point is Aon Consulting which has recently scored some significant advances in terms of corporate super outsourcing and has attributed at least some of that success to its HR Portal.
Aon’s managing director in Australia, Steward Fotheringham, says utilising the technology in Australia made good sense as part of Aon’s global operations.
He says that unlike some of its competitor systems, the Aon portal has the ability to work with virtually any system.
AUTHOR
Mike Taylor
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