Mercer assembles building blocks for distribution push

Mercer has signed over 10 dealer groups — “with 10 more in the pipeline” — since launching a campaign in June last year to expand the retail distribution of its multi-manager funds beyond its Mercer Wealth Solutions advisers.

The fund manager has also begun targeting other groups with large retail distributions, such as conglomerate dealer groups, friendly societies and banks.

Another aspect of the campaign has been to make available all of its 28 multi-manager funds direct to the retail market, targeting areas such as self-managed super fund groups, which traditionally don’t use platforms.

The campaign’s most prominent aspect, however, remains the ongoing outsourcing of these multi-manager funds on a demand basis to its (current) external platforms, BT Wrap, Macquarie Wrap and Oasis.

Six funds have been placed with these platforms since June last year, when the campaign kicked off with Mercer’s Income Plus Fund becoming the first multi-manager fund to be outsourced.

The funds that have been launched since then are Diversified Alternatives, Growth Plus, High Growth Plus, Shares Plus, Australian Shares Plus and Overseas Shares Plus.

Mercer is also increasingly being “appointed into model portfolios” as a result of the campaign, which heralded a change in Mercer’s retail distribution by allowing external dealer groups to access its multi-manager funds.

The latest campaign initiatives mark the next phase of Mercer’s distribution strategy, which is designed to increase market share in the multi-manager sector, currently dominated by MLC and Russell, according to Mercer head of investment management business Gary Burke.

“Our objective, over time, is to expand our distribution reach by making more of our funds available to dealer groups via platforms,” he said.

“Key to this strategy is external endorsement by researchers such as Lonsec, which recently assigned their highest possible rating to six Mercer Plus Funds.”

The next stage of the campaign will now also focus on “developing good relationships with internal researchers at the dealer group level”, according to Bronwyn Speed, Mercer’s head of the retail distribution drive.

“Some of them are keen to badge our funds, whilst others are looking into constructing their own diversified funds using some or all of our investment building blocks.

“This represents a great opportunity for us to expand our distribution, as our ‘building block’ approach is a unique way for dealer groups to have innovative, tailor made solutions utilising global research at a reasonable cost.”