Direct to customer will be an important part of IOOF’s new superannuation strategy, the company’s CEO Renato Mota has said.

With the combination of ANZ’s Pensions & Investments (P&I) business now complete and its acquisition of MLC expected to close pending regulatory approval at the end of June this year, Mota said IOOF is well placed to take advantage of more direct member engagement expected to flow from Your Future, Your Super reforms.

“Clearly there is a move towards having people more engaged in their super and making more deliberate and active decisions. In a world where we have members of super funds more empowered and engaged in decision-making there is a great opportunity to engage directly with them,” Mota said on a call discussing the listed company’s half year results.

Smart Choice is the direct to customer super product IOOF acquired through its P&I acquisition, an offering Mota said the business planned to grow.

So called ‘fund stapling’ proposed under the Your Future, Your Super package of reforms is likely to result in employers promoting direct fund referrals rather than developing their own options, a dynamic that observers expect to lead to accelerated growth in these direct to customer offerings.

Mota described the direct to customer channel as the “third pillar” of member engagement likely to emerge in light of government reforms next to workplace arrangements and financial adviser referrals.

He described the deal with MLC as a key part of the direct to customer strategy.

“Consolidating gives us the best chance to have the lowest cost to serve… the acquisition gave us bulk but scale will come through consolidation, he said.

At the end of August last year IOOF announced it would pay $1.44 billion to National Australia Bank to acquire MLC in a surprise deal that superseded discussions the bank owned wealth manager was having in parallel with private equity firms.

IOOF has said it plans to combine MLC’s wrap, Plum and MasterKey businesses with IOOF’s Pursuit, Employer Super and its P&I platforms. A combined MLC/IOOF superannuation businesses would look after around 2.2 million members and administer $196.3 billion in assets, taking its place among the country’s largest funds including Australian Super, Aware Super following the combination with First State Super, Vic Super and WA super, and the recently announced but yet to be formalised combined QSuper/Sunsuper.

NULIS, trustee of the MLC Super Fund, has confirmed the transaction with IOOF is in the members best interests, Mota told analysts on the Wednesday earnings call.

“This will be a big input into APRA’s opining on the transaction,” Mota said of the approval.

NULIS will continue to provide oversight to protect member interests, the earnings disclosures noted. IOOF continues to work with the trustee boards as customers are transferred into between products with differing pricing as platform consolidation continues, Mota explained to analysts.

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