- Written by Jessica Houston
The funds management sector has grown exponentially since the introduction of compulsory superannuation in the early 1990s. The industry is split into retail and industry funds where the pressure is on the retail funds to reduce their fees/commissions so that they can compete against the industry funds that are run for the benefits of the members, not the shareholders.
Chairmont has been involved in a number of assignments in this sector. This work has crossed all areas of funds and asset management. It has involved working on platforms, product family types, e.g. hedge funds, Self Managed Superannuation Funds (SMSFs), trustee and custodians and the various market sectors, e.g. Commercial Property trusts. This work has included:
- Assisting in the outsourcing of funds management activities of a major fund manager/trustee.
- Program managing the post merger integration of two fund managers.
- Conducting Request for Tenders (RFTs) and Request for Information (RFIs) in the areas of international equities and fixed interest funds.
- Working with different fund managers on their business models, e.g. fund of fund and multi-manager.
- Considering the issue of whether to hedge or not to hedge, foreign currency exposures.
- Working with a number of Listed and Unlisted property Trusts on a range of issues, including outsourcing agreements, licensing requirements, Customer Relationship Management (CRM) business and technology issues.
The funds management sector will continue to grow with the increases in compulsory superannuation contributions to come into effect over the coming years, and as organisations respond to the Future Of Financial Advice (FOFA) reforms, and other local and global compliance and product initiatives. The industry continues to segment into major fund managers and independent niche players. The recent decision by BlackRock to withdraw from active Australian equities is indicative of the issues facing fund managers that do not out-perform their stated index. The winners will be the index players, or index based products, as it is extremely difficult for fund managers to consistently out-perform the index.
Similarly, product distribution is continuing to divide between tied and non-tied (independent planners).