Business News

SMSFs troublesome for asset managers

The rise of SMSFs is potentially disruptive for the Australian asset managers as they prepare to change their business models, however, some managers will find opportunities to create innovative solutions, a State Street report has found.

The “Frontline revolution: The new battleground for asset managers” report highlighted the transformation of the superannuation space, as funds identified new efficiencies and managed more assets directly, as a key factor causing asset managers to fundamentally rethink their business strategy.

It said 84 per cent of Australian managers were planning to embark on a fundamental shift in business strategy in the coming years to meet changing client demands in the areas of innovation, distribution and front-office solutions.

The report revealed that while SMSFs represented a competitive threat to asset managers, they created opportunities for managers that could provide innovative solutions to investors who managed their own retirement funds.

“Asset managers must innovate and create an investment strategy that meets the needs of the superannuation funds while ensuring growth,” the report said.

In addition, when asked which investment strategy Australian asset managers believed would contribute most to business growth over the next three years, 80 per cent indicated multi-asset solutions would help meet clients’ objectives.

The report surveyed 300 senior executives at asset management firms that managed at least US$5 billion in retail and/or institutional client assets.

Respondents were equally distributed across the Asia-Pacific region, North America and Europe.

There were 30 Australian respondents, accounting for just under one-third of the Asia-Pacific managers surveyed.

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