In an environment where investment returns are anything but certain, Elia says the ability to announce a two-year fee freeze was an important message of stability and consistency to members.

The administrator of HostPlus, Superpartners, is about to spend around $100 million replacing its outmoded systems, but Elia says its existing contract will stay in place while that work is carried out, and upon completion the greater levels of straight-through processing achievable will place further downward pressure on costs.

“Other funds have since introduced percentage-based administration fees, in addition to their flat fees, and you could argue that they have not pursued the types of expansive strategies that we have,” Elia says.

Indeed it is difficult to criticise the marketing campaign’s effectiveness.

The name HostPlus is not only well known inside the industry, but is also one of the few funds to have a high level of recognition amongst the general public.

Even the taxi driver from the airport showed a faint familiarity at the mention of HostPlus’ name when he asked what had brought this reporter to town.

Jeff Bresnahan, chief executive at SuperRatings, says that one of HostPlus’ most outstanding achievements was to attach a recognisable brand to something most young people don’t want to know about.

Elia shrugs off suggestions that the fund could be lower cost. “’Profit for members’ does not mean that funds cannot spend money on marketing and services,” he says.

“I’ve often said to myself that if this business that we are in was entirely about the lowest cost and the best investment performance, then a select few industry funds would dominate. Yet the retail funds continue to prosper. How is it that more expensive, and often poorer performing funds continue to attract customers?

“I think it has a lot to do with brand: brand is basically about credibility, about building trust, and giving your members confidence.”
Another reason HostPlus does not aim to be the lowest cost provider is its wish for sustainable, long-term partnerships with its service providers, Elia says.

“When we sit down with our service providers, our focus is not on screwing them to get the lowest possible price at the lowest common denominator. If you can do that and it is sustainable, then that is fabulous. But I think in any business you want your partners to be able to generate a return and continue to reinvest in their own organisation. That is really important. We’re not about to bleed a company out of existence and then shop around for another service provider.”

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