POWERED BY MOMENTUM MEDIA
Pillar sale brings admin competition into focus
Competition needs to be maintained in the superannuation administration sector, according to a Super Review roundtable of senior superannuation executives conducted during the Conference of Major Superannuation Funds (CMSF).
Just months ahead of the NSW Government initiating the sales process for Pillar Administration, most roundtable participants agreed that it would be concerning if the owner of the largest superannuation administrator, Australian Administration Services (AAS), was allowed to acquire Pillar.
AAS is owned by Link Market Services which recently acquired Superpartners, making it the largest administration entity.
All the roundtable participants agreed that it was desirable and healthy to maintain competition in the administration space, with both EISS Super chief executive, Alex Hutchison and Kinetic Super chief investment officer, Paul Kessell pointing to their use of AAS but urging the maintenance of continued competition.
Kessell said that at the moment Link was the dominant player in the market and that, given the barriers to entry, there seemed little interest from overseas players.
Pillar Administration chief executive, Peter Brook said he recognised that Link had been touted as an acquirer for the Pillar business — something which would give Link "close to 90 per cent of the total market".
He said that while third party administrators such as Pillar and AAS were not regulated by the Australian Prudential Regulation Authority (APRA), Pillar had held meetings with the regulator where it had been acknowledged that it was an area of interest.
Brook pointed to the fact that academic research had pointed to systems risk with respect to custodians.
"There are a lot more custodians than third party administrators and Link has its own systems and I can understand why APRA might therefore be concerned," he said.
Recommended for you
The two funds have announced the signing of a non-binding MOU to explore a potential merger.
The board must shift its focus from managing inflation to stimulating the economy with the trimmed mean inflation figure edging closer to the 2.5 per cent target, economists have said.
ASIC chair Joe Longo says superannuation trustees must do more to protect members from misconduct and high-risk schemes.
Super fund mergers are rising, but poor planning during successor fund transfers has left members and employers exposed to serious risks.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
88.01 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.24 3 y p.a(%)
4
Pengana High Conviction Equities B
40.36 3 y p.a(%)
5
Pengana High Conviction Equities A
40.34 3 y p.a(%)
The suggestion that Link would have 90% of the fund admin market is just plain wrong. The majority of funds with contestible fund admin operate self administration.