Australia's retail platform market needs to create a united front to combat the threats of competition for fund inflows from external sectors, the distribution head of a financial services firm has said.
"The threats to platforms will emerge and are emerging. Industry funds and DIY funds are absolutely growing and are revitalised," Colonial First State Investments general manager distribution Paul Barrett told delegates at yesterday's Wraps, Platforms and Masterfunds conference.
"Their growth might be good for fund managers and insurance companies, [though] retail platforms are absolutely under threat."
In the last quarter, industry funds took more than $4 billion in superannuation inflows, compared to the retail market's inflows of more than $2 billion, he said.
Despite industry funds enjoying a lion's share of super monies, the platform market needs to understand that competition is not always a negative.
The sector should use competition as an opportunity to revisit its value proposition and reconnect with investors, Barrett said.
He said retail platforms need to better-articulate their value proposition, to include strong capital backing, business-to-business infrastructure, T+1 service for lending platforms, and the value of advice.
"The reason why the superannuation battleground... is attracting so much of the competition and interest is not just because of the inflows or SGC (Superannuation Guarantee Charge), but because it is of immense strategic importance to the nation, the savings crisis and our baby boomers, the ones with the time, the debt and the super," he said.
"We need to define succinctly what the benefit of advice is. No one has cracked the code on that."
