As Australia's superannuation sectors continue to redefine themselves, it seems direct investment options have become a new norm for industry funds.
Yet for Aaron Dunn, managing director of the SMSF Academy, it would be naive to think that a desire to compete with self-managed super funds (SMSFs) had not entered the equation as well.
"It's absolutely a combination of both," he said. "I think a lot of these things were initially a direct response to some of the outflows that were occurring directly to the SMSF market but then, as industry funds started to go through and engage with their members, I think at that point the motivation changed.
"So when they found out about what their members were wanting and what the needs of those members were, they started to work through some of the processes around how they could build greater choice into their existing offering," Dunn continued.
"And obviously direct investment options were the result."
For Dunn, while SMSF leakage and outflows may have been the initial trigger, direct investment options were almost certainly something members of pooled superannuation arrangements were demanding as well.
"Quite clearly, the more that you get an understanding of the needs of your members – which I would presume industry funds are heavily invested in – the better you are able to respond," he said.
"And that's what a number of industry funds seem to have done. They've found out more about what their members want and what their needs are, and then they've developed product to specifically cater to that."
Originally published by SMSF Essentials.
