POWERED BY MOMENTUM MEDIA
(May-2004) ...but most funds continuing to succumb
The main drivers for corporates outsourcing their superannuation over recent years have primarily been cost savings and the desire to outsource non-core business activities.
While this remains the case across the industry, the recent implementation of FSRA and the proposed APRA trustee licensing has added further dimensions to the rapidly growing trend for corporate super funds to outsource to corporate master trusts.
MLC Corporate Solutions recognises these trends, but believe cost-efficiencies and risk reduction are only part of the equation for corporates choosing to outsource to a master trust.
Similarly for corporates reviewing their existing master trust arrangements with a view to moving from one service provider to another, price and performance are only one part of the decision making process.
We are seeing a change in the decision making process for corporates choosing a master trust provider. Corporates are now looking for packaged value added benefits for their employees, in particular, financial education and advice in the workplace.
With the commoditisation of the master trust market over the last three years, product features such as administration services, Internet access and investment choice should be a given.
A major trend that we are seeing from corporates is that they want assistance for their employees beyond investment choice and price.
Corporates are looking to access a range of ongoing services for their employees including financial education and advice, lifestyle benefits and a range of other financial services.
In response to these trends MLC Corporate Solutions have established an SME (small to medium enterprise) business that provides a holistic business solution tailored to the individual needs of the corporate and their employees.
We now have specialist corporate advisers within Business Wealth Management who are employed to assist corporates in packaging up a range of services for their employees.
Within the SME Business, Workplace Solutions supports financial advisers who specialise in a business proposition.
“Our business has grown dramatically over the last two years with the increase in the number of corporate financial advisers entering and having success in this market,” says Leanne Gregory-Aylett, general manager MLC Workplace Solutions.
“We believe the outsourcing trend is also being driven by the need for advice and education in the workplace, and we believe financial advisers are the right people to provide this service at both the employer and employee level,” Gregory-Aylett says.
Overall, the challenge for corporates today is to provide meaning in the workplace and a range of benefits that create that meaning.
Employees are looking for more in the workplace — community, fulfilment, meaning and identity beyond just a skill performed and an income earned.
Most employers will tell you that ‘people are their greatest asset’ and whether a business is small, medium or large, one of the greatest challenges they face is how to attract, retain and motivate the right people.
Employers are looking for assistance in packaging an employee benefits program that includes a broader range of services beyond salary and superannuation.
But it is not just about making a range of services and choices available to employees — there is still a gap between what is being provided and a meaningful connection with employees.
Employees are crying out for help and assistance through vetted experts in the workplace. Our research has confirmed this with almost two thirds of employees (62 per cent) indicating they would like to receive access to financial advice in the workplace through vetted external experts, with only 12 per cent receiving financial advice through the workplace.
Additionally, 61 per cent would like to receive financial education through their employer while only 9 per cent of employees indicated they were currently receiving access to financial education.
Employers are starting to recognise that helping employees with their financial issues is smart business. It leads to happier and more productive employees and provides the competitive edge in the race to be seen as an ‘employer of choice’.
MLC Corporate Solutions provides corporate superannuation, insurance, investment and employee benefit solutions to businesses, organisations, and their employees — from small enterprises to large institutions. In addition, through the parent company, the National, MLC Corporate Solutions offers a bundled solution that encompasses a range of banking services.
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