With Game of Thrones (GOT) fever happening at the moment as the final series gets released, I got to reflecting on the fact that we in the finance industry have experienced our very own GOT post Royal Commission. There have been spectacular battles, corporate deaths and some significant changing of the guard of who is sitting on the Iron Throne.
While the battle between retail and industry funds was once fairly evenly matched, it seems like post Royal Commission, the retail super industry from the big houses – namely AMP, IOOF and the big four banks – have lost power and a claim to leadership. It is definitely the industry funds that are sitting squarely on the Iron Throne of Super.
I have to say, having filmed our last series of After Hours with CEOs of super funds, I can really understand how the industry funds have built such brilliant businesses. Yes, they have mandated funds flow - they haven’t had to chase customers to put their money in. Which makes it easier to predict the growth, and therefore what is needed to be spent on these giant businesses.
While they have had to compete with each other for market share once public offer was rolled out, they have also been smart enough to be allies, to group together and pool resources to fund their campaigns – knowing there is strength in numbers and it takes a lot of money to reach the Australian public with messages around money.
This is like the great houses of GOT that align together – while they all may secretly covet the Iron Throne, they understood that to beat a common enemy they have to stick together. It will be interesting to see how many others who have been supporters of the retail industry will find themselves aligned with the houses of industry funds in the future.
Perhaps the biggest competitive advantage industry super funds have had over the retail market is the fact that they are not listed, and not for profit. This means their true purpose is, and always will be, member first.
While publicly listed companies can focus on the customer as much as they can, at the end of the day their fate is determined by their owners - and their owners are shareholders who have invested their own money for profit. This serving of two masters is like being aligned to two great GOT houses. Sometimes their agendas are different, and the most powerful hold is the one that controls the money.
There has been a whole lot of GOT-style intrigue and scandal around advice, and we are seeing the prophetic words of Little-Finger come to life - “There are two types of people in the world – the players and the pieces.”
While the pieces are still moving, and the players continue to emerge or drop off the landscape, one thing is for certain - the end game for financial services is as unclear as the ending for GOT - it truly seems that anything could happen.
Until next time,
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