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Super trends identified in new handbook

THE growth of implemented consulting is one of the notable trends featured in SelectingSuper, a new corporate superannuation handbook.

Implemented consultants in Australia manage about $11 billion on behalf of 60 in-house company superannuation funds.

SelectingSuper, launched this month by research group Rainmaker Information, is designed to help companies outsource their superannuation.

Implemented consulting has grown on the back of the same outsourcing trend, according to Alex Dunnin, research director of Rainmaker Information.

The key attraction of implemented consulting is that companies can retain their in-house super fund yet outsource some key functions.

Six implemented consulting firms dominate the sector, including Frank Russell Australia, Intech Asset Consulting, JANA Investment Advisers and MLC Implemented Consulting.

Mr Dunnin said implemented consulting evolved from regular asset consulting.

Asset consultants are used by super funds to help with tasks such as developing investment strategies, selecting fund managers and monitoring investment performance.

They now control nearly 90 per cent of superannuation assets and are “the most influential group of advisers in the superannuation industry”, Mr Dunnin said.

The problem for asset consultants is that much of their regular business is under threat, as many companies outsource their superannuation.

In fact the number of corporate superannuation funds has fallen by more than 50 per cent over the past five years.

The most common options for outsourcing are corporate master trusts and industry super funds.

The asset consultants have responded by reinventing their business to include either their own corporate master trust or an implemented consulting service.

“A good example of how some super funds have taken advantage of their implemented consultant is to ‘bolt on’ the implemented consultant’s investment options to their own super fund to smoothly and quite dramatically improve their member investment choice offerings,” Mr Dunnin said.

Other services offered by implemented consultants include asset administration, call centre support, web services, investor education and trustee responsibilities.

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