David Atkin, chief executive of Cbus has declared the growth in members of industry funds leaving for self-managed super funds at an end.
The announcement comes the same day the scheme launches a member direct platform to cater for large account holders who want to manage their own investments.
“Members moving to SMSF is an ongoing problem for Cbus and the industry, but it has plateaued,” said Atkin. “We are now seeing good progress on retention, members coming into decision making mode in retirement are now staying with Cbus.”
The launch has been timed to coincide with the full roll out of its referral program with the Financial Planning Association (FPA) of Australia. A move that has seen it shut down its internal team of financial planners, although the fund still offers basic superannuation advice to members.
The hope is that this relationship will bring new members to the fund.
“You have had this divide between the financial planning community and industry funds, and the comment made from planners is that ‘we do not know enough about the industry funds, so we cannot recommend them’,” says Atkin. “There will be planners around the country that will have deep knowledge of the fund and they will be in a position to recommend Cbus if they feel that is the best product for their clients.”
The relationship with the FPA has completed a trial phase to ensure members were getting appropriate advice.
Atkin believes that its relationship will be advantageous as the FPA has a wider geographic coverage than its old financial planning team, which had only covered major cities.
Atkin says the ongoing costs of using the Cbus member direct platform will only be $900 a year, compared to the estimated $1200 to $8200 administration costs of running a more conventional SMSF, as calculated by Rice Warner.
He estimates these fees will have paid back the set-up costs of the platform after three years of operation and he justifies the cross-subsidy from other Cbus members who will not use the platform in terms of the role it will play in ensuring the fund retains the benefits of scale.
The Cbus self-managed platform offers access to ASX 300 companies, 16 exchange traded funds from Vanguard, iShares and State Street, as well as term deposits from National Australia Bank and ME Bank.
No more than 10 per cent can be allocated in any one investment, while $10,000 must be kept in other standard Cbus investment options to ensure the account remains functional.
From March 2015, users of the platform, which has been designed with UBS, will have access to Cbus investments in unlisted property and infrastructure.