The future of master trusts
Nearly three years’ ago a round table discussion was held in Sydney involving technology providers, analysts and master trust executives, with the subject being the future of master trusts.
While there was a good deal of argy bargy about relative costs and investment performance, one of the most salient comments to emerge was that master trusts were ultimately reliant upon technology, and that any significant future change to the master trust landscape was likely to be driven by technology.
It was suggested that the next big thing to happen in the master trust sphere would be generated by the next “killer application” delivered by the technology providers.
Now, some 36 months down the track, that analysis appears to still apply, even though no “killer application” emerged to give anyone a particular advantage.
Looking at what is emerging in the technology arena, Financial Synergy’s business development manager John Burke makes clear that good technology is one of the things that will help keep superannuation funds and master trusts competitive in the new choice environment.
He suggests that while there has been no single “killer application” to emerge from the fray, inroads have been made with respect to technology that brings funds closer to their members.
“No single application stands out in the crowd, however one of the key areas of innovation as we’re seeing it is the personal approach to customer interactions on a large scale,” Burke said.
He said that technologies outside of the financial services industry were beginning to creep into the industry to make member interactions with funds more personal and cheaper.
“These technologies can deliver a high level of personalised customer service at any time without necessarily needing human intervention,” Burke said.
He said that master trust providers needed to make full use of the available technology to communicate effectively with their clients at the same time as providing real-time interaction through multiple channels.
“In this context, technology does not drive success or failure at all,” Burke said. “It is up to the administrators to take advantage of the technologies that their vendors make available to them. If the vendor can’t deliver in a timely and cost effective manner, then it’s time to change.”
He said that, ultimately, master trust providers needed to maintain their investment in technology to maintain flexibility of processes, availability of information, and a full array of communications channels.
“In order to stay competitive and relevant, industry participants have needed to keep up with these three technology enabled elements,” Burke said.
He said that perhaps one of the most significant impacts of technological change had been the emergence of transparency in circumstances where information is being processed in a more timely fashion, and is made available to many people through many channels — warts and all.
AUTHOR
Mike Taylor
Recommended for you
In this week’s episode of Relative Return Unplugged, AMP chief economist Shane Oliver joins the show to unravel the web of tariffs that US President Donald Trump launched on trading partners and take a look at the way global economies are likely to be impacted.
In this episode of Relative Return, host Laura Dew is joined by Andrew Lockhart, managing partner at Metrics Credit Partners, to discuss the attraction of real estate debt and why it can be a compelling option for portfolio diversification.
In this week’s episode of Relative Return Unplugged, AMP’s chief economist, Shane Oliver, joins us to break down Labor’s budget, focusing on its re-election strategy and cost-of-living support, and cautioning about the long-term impact of structural deficits, increased government spending, and potential risks to productivity growth.
In this episode of Relative Return, host Laura Dew chats with Mark Barnes, head of investment research, and Catherine Yoshimoto, director of product management, from FTSE Russell about markets in Donald Trump's second presidency and how US small caps are faring compared to their large-caps counterpart.
