Inside Super 2 (UPDATE) – Direct-to-consumer: remaining relevant in the future of super distribution
‘Market forces are already delivering a kind of Best in Show’
In November we shared with you insights on remaining relevant in the new super distribution landscape. Click HERE to see our initial analysis.
Our analysis showed that an increase in switching activity was largely benefiting two industry funds, who have seen record cash inflows (see exhibit two in link above), mostly at the expense of the retail funds that came under intense scrutiny during the Royal Commission.
Since then new data has become available through the recently released ANNUAL FUND-LEVEL SUPERANNUATION STATISTICS (released by APRA on 10 December 2019) which shows that these two funds continue to win the vast majority of ‘switching FUM’ as demonstrated by net roll-ins excluding successor funds transfers (SFTs).
The updated data in exhibit one shows that:
- AustralianSuper and Hostplus continue to be the winners of the increased switching activity post-Royal Commission. Together, they received $15.6bn in net roll-ins in FY19, more than double the roll-ins they received in FY18.
- The combined net roll-ins to the next three funds in the top five nearly doubled, to $2.3bn, but was well short of the top two funds.
- The rest of the industry fund sector (excluding the top 5 funds) continued to experience negative net roll-ins, although their net position improved significantly from the previous years.
The following chart (exhibit two), which includes updated information, shows that retail funds are by far the main source of roll-ins to the winning industry funds.
Right Lane can help your fund build the capability and adaptability in the direct-to-consumer market, while supporting the culture and skillsets needed now and in the near future.
Some of the questions we help funds answer include:
- What is the size of the direct-to-consumer distribution opportunity?
- Where should we look for opportunities?
- What consumer segments should we target now, and how?
- How can we uncover the real needs and preferences these consumers have?
- How can we design compelling solutions that meet consumers’ needs?
- What processes and capabilities are needed to develop new products or solutions to capture these opportunities?
Get in touch with me to discuss how we can help you build a successful direct-to-consumer distribution channel.
Abhishek Chhikara, Associate Principal
P: 03 9428 5336 or abhishek.chhikara@rightlane.com.au
About Abhishek Chhikara
Abhishek is an Associate Principal with Right Lane with deep experience in strategic thinking and planning, operating model design, and organisational effectiveness. In his time at Right Lane, Abhishek has worked with over 50 clients on more than 100 consulting projects. Abhishek has extensive experience in consulting to profit-for-member superannuation, having served 15 superannuation funds and fund service providers on nearly 70 projects, ranging from board strategy offsites to investment team capability building. He has a particular interest in investment management and has worked with investment teams of three funds on projects relating to portfolio and operating model strategy, execution effectiveness, and business case development.
Abhishek has also played a leading role in Right Lane’s thought leadership in superannuation, contributing to the Right Lane’s work on retirement incomes and the development of recent editions of Right Lane’s annual Industry Super Forces at Work report.
Right Lane: The purpose-driven consulting firm exclusively serving industry super funds
- We have served industry funds exclusively for almost 20 years: Industry super is one of our core areas of expertise; we have served more than 20 not for profit funds on more than 300 projects, and worked with their service providers in administration, funds management, group insurance, advocacy and banking. We understand deeply the context within which you operate.
- We have unparalleled knowledge of your operating context: We produce a leading body of work on sector trends to which most large industry funds subscribe; to our knowledge, we have served more profit-for-member funds on topics relating to strategy, outcomes measurement and accountability than any other consulting firm.
- We unlock value through a commitment to highly inclusive processes: Our approach ensures high engagement, and results in strong buy-in to the outcomes.
- We have top-tier consulting credentials: Our consultants all come from top-tier management consulting firms or were trained by them. Since our firm was established, more than 70% of our non-graduate consulting staff have previously worked for McKinsey, BCG, Booz (Strategy &), A.T Kearney, or LEK.
- We are an ethical consulting firm choosing to only serve profit to member super funds. We are aligned to the values of industry super and stand by our commitment to the network.
Previous ‘Inside Super’ insights are available here:
Inside Super 1 – From strategy to SEAR: regulatory overreach or reasonable expectations?
Inside Super 2 – Direct-to-consumer: remaining relevant in the future of super distribution
Inside Super 3 – SPS 515 puts the spotlight on strategy execution
We hope the ideas presented here have given you something new to think about. We would love the opportunity to discuss them with you in more detail. Get in touch today.