Leading superannuation administrator Link Group and global asset manager Russell Investments today announced a new alliance aimed at giving Australian superannuation funds greater scale and innovation across both the investment and administration spectrum.
Under the new arrangement Link Group will integrate Russell’s Australian superannuation administration business, with the view to the two firms offering existing clients and the broader market a joint ‘best of breed’ administration/investment service.
Russell’s 130+ strong administration team will join forces with Link’s administration team – creating an administration powerhouse overseeing $100 billion in assets and further cementing Link’s position in the increasingly competitive super environment. The alliance is designed to have Link take on all administration duties for Russell’s stand alone administration super clients together with the employer clients in the $5.3 billion Russell SuperSolution MasterTrust.
Link Group Managing Director John McMurtrie said he was excited to welcome Russell staff and clients to the 1,800 strong Link Group, which currently provides administration services to more than four million Australians. Current Link clients include REST, TWU Super, Tasplan and CareSuper.
“Our objective is to continue to deepen our scale and member footprint in the highly competitive superannuation member administration industry in Australia. Having completed our almost $200 million investment program over two years ago we are in a strong position to support all of our clients through an uncertain regulatory environment.”
Stronger Super takes hold
The move comes as super funds face a challenging year ahead with an increased focus on individualised member engagement as well as new transparency measures, reporting requirements and regulatory compliance under the raft of Stronger Super reforms.
Russell Chief Executive Asia Pacific, Alan Schoenheimer, said this created a highly complementary alliance which would allow super funds to access the scale and technology of one of Australia’s leading administration platforms – together with the global scale of Australia’s leading multi-asset investment firm.
“Link Group is an excellent fit for Russell given its demonstrated investment in systems to deal with the rapid changes to Australia’s superannuation environment,” Mr Schoenheimer said.
According to Mr Schoenheimer, long-term success in the Australian superannuation sector not only requires strong investment capabilities but also strong administration expertise. This might, for example, include increasingly sophisticated big data capabilities allowing funds to better leverage large volumes of investment and member data to achieve more tailored member engagement.
“In this competitive environment, firms in the super industry will need to focus on their specialty. We believe there will be a trend towards super funds decoupling their administration and investment arrangements in order to access best of breed providers in the industry to ensure both the investment element and administration element remain highly competitive – all the while controlling costs.
“Given Russell’s core global focus on providing multi-asset investment solutions, this alliance ensures our clients will continue to have the best combination of investment and administration services available in this market. We believe the alliance will be a particularly attractive proposition for mid-size super funds and self administered funds,” Mr Schoenheimer said.
Since acquiring Australian Administration Services (AAS) in 2006, Link has invested significant capital to expand its superannuation operations and fulfil its vision of being an innovator in super administration and a superior provider of member services. Recent innovations have included new contact centre technology to allow more interaction with members, and a new web interface for employers encompassing a clearing house and superannuation member analytics capabilities via Link subsidiary Empirics – a leading provider of end-to-end customer management solutions.
The new alliance will see Link absorb all of Russell’s existing administration systems and technologies. All of the permanent employees in Russell’s administration business and contact centre migrating across to Link will be offered a role on comparable terms, including recognition of existing tenure, and with the opportunity to access wider career choices. Link will now be the pre-eminent defined benefit administration services provider in the Australian market.
