irgin Super will reveal no more details of its pricing or product range until the Richard Branson-owned venture launches, at the same time as choice of fund laws come into force on July 1.
“We don’t want to give our competitors and imitators three months notice,” the managing director of Virgin Money, Rohan Gamble, told Money Management.
It is known that Virgin’s offer will have both personal and employer-sponsored divisions, and will not pay any commissions to financial planners — preferring to win direct customers through a marketing and education campaign costing the best part of $50 million.
Despite assumptions that Virgin’s brand was strongest among under-30s, Gamble said the average customer for the Virgin credit card was 40, and the super product would pitch for a similar mass audience, although he expected its typical customer would be younger.
Gamble saw Virgin Super’s most direct competitors as “all the high-priced, low performance retail funds”, rather than not-for-profit industry funds which tend to have a more entrenched relationship with members.
Gamble did not elaborate on how Virgin Super would outperform other retail funds. He refused to rule out that partner Macquarie Funds Management would supply it with anything but index-tracking funds, although observers doubt it can afford actively-managed investments at the same time as undercutting the market on price.
Gamble rejected claims that Virgin was anti-advice, saying he encouraged all Australians to use a financial adviser, adding he was in discussions with several dealer groups “who are not connected with big financial institutions”.
The flamboyant Branson had personally flown into Australia to launch Virgin Super early last month, immediately putting advisers off-side with claims they were duping clients with hidden fees and commissions.
The Financial Planning Association hit back at the claims, arguing the remarks would prove harmful if they stopped consumers from seeking advice.
Meanwhile, the latest outsourcing partner for Virgin Super is ING, which won a tender to provide life insurance options in both the public offer and corporate-sponsored divisions.
ING group risk manager Paul Trigg said the tender was not won on price, despite admitting it had been “hotly contested”.
Trigg said he had worked with Virgin Super’s product manager on “sustainable” insurance terms for new members, to ensure that “every dollar in the door wouldn’t cost them $4 down the track”.
