- Alliance champions renaissance of the independent fund amidst fund consolidation trend
SYDNEY, March 28, 2018 – Superannuation provider and global asset manager Russell Investments today announced that Nationwide Super – Australia’s Small Business Super Business – will join the firm’s growing superannuation alliance. Under the arrangement, expected to be complete by late 2018, Nationwide will cement its brand and value proposition as the specialist superannuation service for small businesses, while Russell Investments manages all components of the fund.
“We are very excited for Nationwide to join the superannuation alliance and look forward to supporting their growth plans,” said Jodie Hampshire, Managing Director, Australian Institutional at Russell Investments. “Nationwide already plays an important role in supporting Australian small business, and we are incredibly proud to enable them to continue to focus on this important mission.”
As part of Russell Investments’ $9+ billion super alliance, serving more than 105,000 members, Nationwide will leverage a scalable foundation to focus on opening new promotion and distribution opportunities as they better support small businesses with their super obligations.
“Our absolute priority remains helping small businesses and their employees,” said Kim McHugh, Nationwide Super Chair. “Super creates administration and compliance pressure for small business that simply isn’t acknowledged or addressed by many larger funds. We were looking for a partner that would take the time to understand our members and employers, and help shape our offer to even better meet their needs.”
In making this decision, Nationwide expects its members will benefit from significantly reduced fees, an expanded menu of world-class investment choices, and enhanced member services. This will include additional advice services, expanded education and communications, and leveraging the latest technology, including an industry-leading mobile app and the multi-award-winning To-Do List, to improve engagement.
“The alliance model allows Nationwide a unique opportunity to reset our cost base, gaining considerable cost advantages in areas such as investments, administration, product management, technology and compliance” said Ian Morante, Nationwide Super CEO. “These savings will be passed onto our existing 35,000 members as lower fees, and upgrading our offer and services to be even more tailored to small business. As a result, we are expecting a strong growth trajectory for Nationwide.”
In addition to scale benefits, Russell Investments’ superannuation alliance model allows independent funds the flexibility to choose which functions to outsource, insource, or co-deliver. It also offers alliance partners the choice to retain preferred vendors and service providers. For instance, Nationwide will retain its underlying administrator in LINK Super, and its insurer, CommInsure.
Through this model, the firm champions the renaissance of the independent fund. By providing flexible alternatives to basic mergers, the firm enables niche superannuation brands to differentiate, compete and grow amidst a backdrop of fund consolidation.
“It’s no secret that industry pressures are forcing consolidation, and will continue to for some time,” Ms Hampshire said. “Our alliance offers a way for independent superannuation funds to grow and sustainably evolve – a real alternative to the vanilla merger.”
Ms Hampshire added that the firm offers the economies of scale that these funds need to compete, with the breathing room to tailor their brand and service delivery to the specific needs of their target market and members.
“I see a world where consolidation has the potential to over-commoditise super, whereas we know that many members appreciate the differentiation in their funds’ value proposition,” Ms Hampshire said. “I believe we will see a renaissance of the independent fund, as they discover economic models that allow them to compete and genuinely differentiate their service delivery for the benefit of their target market and membership.”
About Russell Investments
Russell Investments, a global asset manager, offers multi-asset portfolios and services which include advice, investments and implementation. Russell Investments stands with institutional investors, financial advisors and individuals working with their advisors—using the firm’s core capabilities that extend across capital market insights, manager research, asset allocation, portfolio implementation and factor exposures—to help each achieve their desired investment outcomes. The firm has AUD $379.2 billion in assets under management (as of 12/31/2017).
Headquartered in Seattle, Washington, Russell Investments operates globally with 21 offices, providing investment services in the world’s major financial centers such as London, Paris, Amsterdam, Sydney, Tokyo, Shanghai, Toronto and New York. For more information about how Russell Investments helps to improve financial security for people, visit https://russellinvestments.com/au/
About Nationwide Super
With over 30 years of service, Nationwide Super remains committed to its original objectives – to establish and grow a multi-industry super fund that provides exceptional products and services, especially for those who own and work in small business. Known as the Small Business Super Business, Nationwide supports 35,000 members and over 7,000 employers Australia-wide to make superannuation simple, by keeping fees low, providing competitive and value-added product features, along with personalised advice, tools and benefits.
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