Mandates with large employers contributed $648 million in net flows to Insignia Financial’s funds under administration in the final quarter of the financial year.
In a business update lodged with the ASX on Thursday morning, Insignia (formerly IOOF) said workplace super was a meaningful contributor to the company’s FUA, which ended the financial year at $209 billion, up 1.7 per cent over the quarter.
“The net flow profile of our business has gone from, two years ago, being in excess of $4 billion net outflow to now being net flow positive,” Insignia chief executive Renato Mota tells Investment Magazine. “Workplace has been a big driver of that.”
Insignia added 12 new employer clients in FY23, representing a $500 million boost to the company’s pool of assets. It now manages the workplace super arrangements of 11 of the 30 largest ASX-listed companies, Mota says. He declined to name the new clients but said a number of “household names” were among them.
“We expect to grow this part of the business,” he says. “We’ve always been a big believer in the role of workplace propositions. Fortunately for us, we’ve got a large cohort of very large organisations that are prepared to invest and see super as a core part of their employee value proposition.”
Mota attributes the growth partly to the Your Future Your Super performance test and government’s focus on member engagement, laid out at the Investment Magazine Group Insurance Dialogue last week, as well as fears around triggering the complex financial advice laws.
“Going into tea rooms across the country and having seminars, helping people with a variety of general advice matters, is something that some of their competitors aren’t doing or aren’t prepared to do,” Mota says. “Our [offer] has a very strong service orientation.”
For Insignia, which has a large cohort of advised members on choice products, employer mandates present an opportunity to gain long-term business from younger, unadvised consumers, he says.
“If I look at our workplace book, the average age there is significantly younger than our advisory group,” he says. “That’s where that growth really is – the accumulation of our population’s superannuation guarantee.”
The update also announced Insignia was appointing Fortune 500 technology firm FIS to provide the underlying registry platform for its master trust business. FIS, a service provider to MLC for over 20 years before the Insignia acquisition, will supply its Compass tech platform to Insignia, which will form the basis of a new “shared technology ecosystem” for its wrap, super and pensions products.
“We did a really thorough review of what are our options to make sure that we’re building leading edge, master trust credibility,” Mota says. “It’s largely black end we will complement with our own front-end pieces of technology. So, this is why we’re describing it as an ecosystem. We’re not outsourcing everything.”
Mota adds the deal with FIS shows Insignia is making good progress migrating MLC’s processes off NAB’s ageing tech stack.