Greg Bright

Technological advances and demographic trends are combining to forge an unprecedented level of disruption to the major players in superannuation and investment. The big industry and public sector funds, the big platform providers, the big fund managers are all feeling the heat.

Technology is driving down the costs associated with the administration of SMSFs, roboticised advice is making news, if not yet headway, and fintech is attracting a lot of venture and development capital.

In 2013, for the first time since Award Super was introduced in 1986, the aggregate membership of APRA-regulated funds declined slightly. Partly this is due to account consolidation, but, more worryingly for those funds, at least some of it has been due to the loss of high-balance members to the SMSF market.

Industry funds, as the most vocal element among the not-for-profit funds, have hit back with the provision of their own member-directed investment options (MDIOs). There are now about 20 funds which offer these more-sophisticated investment choices – including TDs as well as ASX200 stocks held severally by the members – but many in their camp remain skeptical as to whether this will stem the losses to SMSFs.

In a similar vein, funds managers are suffering from the growth in SMSFs, whose average asset allocation is skewed towards a limited number of directly held Australian stocks, cash and TDs and property.

It is against this background, a confluence of events and changes leading to uncertainty about direction and future growth of Australia’s financial institutions, that some of the “disruptors” and some of the traditional players will come together on the Gold Coast, February 22-24, for a conference called “My Platform Rules”.

According to Ian Dunbar, the principal of newly formed consulting firm FinDigital, disruption is taking place across many industries but it seems to be, perhaps belatedly, gathering pace in financial services.

He left UBS Australia last year, where he was most recently the head of its direct-to-member platform, which he launched on behalf of the UBS Platforms Solutions Group in 2011. UBS, with technology partner FNZ, scored the first big super funds – notably including AustralianSuper – to challenge SMSFs with their own low-cost MDIOs. UBS is now working on introducing model portfolios to its platform, which at least fund managers should be grateful for as a potential new point of distribution.

Dunbar says that, as with all change, there are threats and opportunities, potential winners and potential losers.

Dunbar is one of 36 speakers at the My Platform Rules conference. For program and other details go to: www.ioandc.com

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Greg Bright is publisher of Investor Strategy News and a co-producer of the conference.

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