Morningstar moves into industry funds research
|
|
Morningstar is making a push into industry superannuation funds research on the back of demand from financial advisers.
Morningstar manager of investment research Tim Murphy said the group had begun establishing a database of industry fund research to sit alongside its analysis of retail and corporate super funds.
The research house is now receiving data from Catholic Super, Cbus, AGEST Super, Asset Super, CareSuper and Sunsuper — and is close to signing others.
Murphy said the research house’s push into this area was driven by strong adviser demand for information about the asset allocation and performance of industry superannuation funds, “so they can be compared like for like, apples [with] apples”.
Initially Morningstar is seeking monthly performance and asset allocation data, with a view to potentially providing qualitative data about industry funds.
Murphy said the ideal data set would be “full portfolio holdings deep down across the board”, however that’s likely to be “a long way off, particularly in the superannuation space given the lack of regulation around [disclosure] in this market”.
Financial advisers have a regulatory obligation to know the products they recommend to clients. Advisers have often expressed frustration about the lack of information disclosed by industry superannuation funds.
Based on his discussions with substantial numbers of advisers across Australia, Murphy believes there may potentially be substantial adviser support for industry superannuation funds.
“But at the moment they’re putting their hands up in the air saying ‘we can’t recommend something we don’t know much about’.”
Murphy said while basic asset allocation and product feature information is currently available, “there’s not much out there that adequately compares and contrasts [industry funds] at an investment level”.
Murphy described Morningstar’s initiative as a “hand-holding process”, adding the response from industry funds had been mixed.
He believes “industry super funds should see this as an upside, rather than a challenge or a downside”.
“The more information that’s easily disseminated out there in the adviser space, the more likely advisers will be to embrace the use of them.
“Part of their campaign is saying: ‘Advisers have never recommended [industry funds] in the past because they don’t pay commissions, but in the future that shouldn’t be an issue because many advisers will transfer to fee-for-service,’” Murphy said.
“If you take away that issue, the secondary issue is the advisers need adequate information to be able to make an informed recommendation of their product. “There’s an opportunity there for [industry funds] that they either don’t realise, or aren’t in a position to capitalise on at the moment,” Murphy said.
Recommended for you
After seven years at the company, Iress’ chief technology officer for wealth management APAC, Anthony Gerrits, has departed as the firm commences a search process to fill the role.
With advice firms thinking about scaling up in 2025, research has detailed the main avenues financial advisers say they have used for successful recruitment.
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
