This year’s top 10 stories included a peek into AustralianSuper’s international equities build out in London, AMP’s move to slash employee benefits, and plenty of hard-hitting analysis of the issues that matter in institutional investment. But the real story is how readers helped shape all of that coverage.
Orbis’ Stuart Place is riding from Melbourne to the Moon and Back to fund a treatment for the “monster of a disease” that his youngest son was born with. The investment industry is rallying behind him.
… as Aware mixes inhouse and IFA offerings
Australia’s second-largest super fund will look to bridge the trust gap between industry funds and independent financial advisers (IFAs) as it expands further into the external advice space.
Matt Willis, Aware Super’s head of business development, says the fund plans to build on the advice offering it acquired through its 2020 merger with WA Super and push deeper into the highly fragmented space, still coping with regulatory upheaval following the Hayne Royal Commission.
“It’s about making sure that doing business between ourselves and the IFA market is easy,” he says. “Ultimately, many of them are small businesses and so have a great reliance on the partners they’re working with – the platforms, investment managers, super funds.”
The $125 billion 1.1 million-member Aware has strengthened its offering in the past 10 weeks by allowing advisers to charge fees from super accounts and creating a “very basic” portal that allows them to access their client’s information more easily, solving a bugbear of many advisers. That portal will later form the centrepiece of Aware’s offering as it looks to expand the information that advisers can access and transact through it.
“I wouldn’t say it’s a retention exercise as such, but it’s about existing advisers who might have a relationship with Aware but hadn’t realised they could work with us in a more effective, efficient manner and have moved away from the fund and been placing into the retail platforms,” Willis says.
According to figures released to Parliament, Aware spends around $26 million a year on employing inhouse advisers who provide comprehensive and intrafund advice. But Aware recently undertook a significant restructure of its intrafund advice offering, with reporting from the ‘Australian Financial Review’ indicating that as many as 90 advisers would lose their jobs as a result – a figure that Aware has disputed. Willis says the new IFA offering will be “complementary” to intrafund and Aware’s other advice channels.
“There are things within the intrafund advice scope that are relevant for the individual’s superannuation affairs, but at the end of the day if they have a relationship with an external financial adviser, it’s that adviser that is looking after the full scope of the individual’s affairs and will probably know a lot more about them and their needs than Aware will,” Willis says.
The other component of the push will be expanding relationships with IFAs outside of the licensees and advisers that came with the WA Super merger. Anecdotally, sections of the IFA market view intrafund offerings as a form of conflicted advice and question why more regulatory scrutiny has not been applied to them. This is an issue that has bled into a wider distrust of industry funds despite their clean run through the Hayne royal commission.
Key to getting advisers on board is the appointment of Warwick Gribble, former BT key account manager, as national manager for advice relationships at Aware and the creation of a dedicated adviser relationship team.
“You’ve got to go out there and earn the trust of the adviser. We need to educate the adviser in terms of the great things we can do to help their clients and show the service offering we can give them,” Gribble says. “Once we’ve earned that trust I believe they’ll be very supportive of our offering to their clients and we can show that their clients are going to be in a very strong position by remaining with us in some cases or coming to us in other cases.”
Targeting the external adviser space as a distribution channel may become more popular with the advent of Your Future Your Super, where the new ‘best financial interests’ requirement may make advertising harder to justify.
Willis says that the new offering will make them substantially more attractive to IFAs who have grappled with the difficulty of accessing information from super funds. The other part of the equation will involve educating risk-shy IFAs – who rely heavily on ratings houses to buffer their advice – about Aware’s investment team and ethos.
“We haven’t been a fund that’s spoken a lot about that team, and advisers rightly want to understand how we put portfolios together,” Willis says. “That’s something we’re working really hard on right now… so that [advisers] can feel comfortable recommending our fund but also so that their clients understand how we’re investing their money as well.”
Aware has had a difficult time with financial advice in the last couple of years, both politically and regulatory. It acquired the StatePlus business from the NSW Government’s State Super closed fund for $1 billion in 2016. The price paid and motives behind the deal attracted political and industry questioning. It has been rebranded as Aware Financial Services. More recently, it has attracted significant regulatory ire for charging fees for no service and has remediated more than $100 million to affected members.
