The industry funds’ financial planning footprint is expanding as a result of key outsourcing decisions being made by corporate superannuation funds.
Superannuation outsourcing tender consultants confirmed to Money Management that industry funds emerged as the preferred outsource option for corporate superannuation funds in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Planning Industry, including for the provision of financial planning services.
In many instances the financial planning beneficiaries were not just Industry Funds Financial Services but those self-licensed financial planners who had made it onto the panels approved by the winning industry superannuation funds.
The continuing trend towards corporate funds selection industry funds for outsource arrangements was confirmed by both Deloitte and actuarial consultancy, the Heron Partnership, with Deloitte superannuation partner, Russell Mason, saying it reflected the evidence which was heard during the Royal Commission.
Heron Partnership managing director, Chris Butler also confirmed that industry funds were tending to be the front-runners in the outsourcing tender stakes, with some corporate fund trustees specifying which retail fund providers should not be included in the tender process.
Former Workplace Super Specialists (WSSA) chief executive, Douglas Latto said there was no doubt that industry funds had become front-runners but said it was not just based on what had been heard during the Royal Commission but also on investment performance.
“Investment performance is pretty important and ultimately tends to trump administration,” he said.
The discussion around the success of industry funds in winning corporate superannuation outsourcing mandates came at the same time as the Australian Securities and Investments Commission (ASIC) announced that it had selected AustralianSuper as the default fund for its new employees.
ASIC made the default fund selection in line with it having been removed from coverage by the Public Service Act.