Economies of scale drive Westscheme merger
Economies of scale and a focus on better outcomes for members led Westscheme to seek a merger with industry fund giant AustralianSuper.
It is becoming increasingly challenging for a fund to remain cost effective and the way ahead looks no easier, Westscheme chief executive Howard Rosario (pictured) said in a conference call announcing the merger yesterday.
A trustee has to ask if it should use member savings to build improved products and services and improve access to resources or if it could do better by accessing those features elsewhere, he said.
Rosario hoped to have the due diligence process completed by the end of April with a view to announcing successful completion of the merger by 30 June.
An important consideration of the merger was the creation of a Westscheme division of AustralianSuper that would allow west Australian services and operations, such as the call centre and account management division, to be maintained, Rosario said.
While AustralianSuper members will benefit from further increased scale, the biggest benefits from the merger will be seen by Westscheme members, according to AustralianSuper chief executive Ian Silk.
The two funds use Tower as an insurer and the biggest benefits will be seen around upgraded insurance definitions, Silk said.
As a result of the merger, 97 per cent of Westscheme members will see death and total and permanent disability cover increased by up to 36 per cent, he said.
There will also be improvements to auto acceptance levels and auto entitlement to income protection cover for current Westscheme members, reducing the need for underwriting, Silk said.
Recommended for you
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
