POWERED BY MOMENTUM MEDIA
Vertically-integrated industry funds may challenge banks
Industry funds are becoming increasingly vertically integrated and over time will challenge the incumbent vertically integrated financial institutions, according to a poll taken at this week's Financial Services Council (FSC) Leaders Summit in Melbourne.
More than 80 per cent of delegates who participated in the poll agreed about the rapid evolution of vertically integrated superannuation fund structures in Australia, with a panel of senior industry executives suggesting that, increasingly, superannuation funds were representing a more natural home for financial planning businesses than the banks.
Sunsuper chief executive, Scott Hartley, pointed to increasing indicators that the banks were looking to divest their wealth management businesses in circumstances where the return on investment was no longer as strong as it had been in the 1990s.
Former investment banker and current chairman of UniSuper, Chris Cuffe, said that in terms of the cost of capital, industry funds were simply better placed than banking organisations to invest in wealth management.
"Industry funds have lower capital requirements and fewer conflicts," he said.
Hartley said that while Sunsuper had opted out of an in-house financial planning business, he nonetheless regarded such strategies as being a fine idea for superannuation funds.
However Perpetual chief executive and current FSC chairman, Geoff Lloyd, injected a note of caution about the objective independence of financial planners employed by superannuation funds.
He said planners working for industry funds could not be regarded as independent until they were seen to be recommending products other than those provided by the funds for which they worked.
Recommended for you
Australia’s neutral cash rate may lie above pre-pandemic levels, driven by rising productivity outside of the mining industry.
Nominations and submissions have opened for this year’s Super Fund of the Year Awards.
The industry body has cautioned the government against implementing unnecessary regulations for private market investments, with ASIC currently exploring reforms in this space.
The industry fund has appointed Natalie Alford as its new chief risk officer, strengthening its executive team during a period of transformation.
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
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
