34 minute read
SMSF CHAMPIONS
In a year like no other, the SMSF sector has continued to support the retirement plans of more than 1 million Australians, ably assisted by a range of service providers with the best recognised in the eighth annual selfmanagedsuper CoreData SMSF Service Provider Awards. Tharshini Ashokan and Jason Spits take a look at why advisers favoured these firms.
In a year that will be best remembered for the coronavirus and the ensuing global slowdown that forced many to work from home, the task of providing products and services to the SMSF sector took on a new dimension.
It could be argued that, fundamentally, COVID-19 has not changed the SMSF space. The rules around how funds operate have remained the same and the belated 2020/21 federal budget, for the first time in some years, added no further conditions to those rules.
Yet at the same time change has arrived. Few investment managers would have predicted a sudden and sharp market downturn in the last quarter of the previous financial year, nor the government stimulus packages that helped reverse it. Predicting which markets will recover in the long and short term is an ongoing discussion investment teams are having internally and with their investor clients.
Service providers – such as administrators, document providers and technical experts – also had to reconsider how they could continue to provide their offerings when they could not physically meet or contact clients, and their staff were forced to operate from home offices almost at the drop of a hat.
Technology has always played a role in empowering SMSF service providers and advisers to support and assist clients, but the events of this year have some claiming it has pushed forward the adoption of remote working and online client servicing by about five years.
The following pages cover how the firms named as the leading service providers for SMSF advisers for 2020 have handled COVID-19 for their staff and their clients, and a common theme is more communication matched to the circumstances at hand.
Another common feature is longevity and quality of service offering – but this is not unique to the awards this year. Eight years ago selfmanagedsuper first started to recognise excellence among service providers, teaming up with research house CoreData to present the annual SMSF Service Provider Awards.
Over that time the names chosen by advisers as leading service providers are those organisations which have routinely delivered at a high level and have built brands that have come to speak for themselves.
For example, Accurium, Heffron and Topdocs are repeat winners this year in their respective categories, as are investment firms CommSec, Charter Hall, Vanguard and Magellan in their respective categories. Other names returned to the top of the list, including PIMCO, Argo Investments and BGL, while ASF Audits and Zurich were first time winners.
CoreData managing director Jason Andriessen, who was involved in collecting and analysing the adviser feedback, identifies a number of characteristics, including price and the level of technical support provided, that were critical to advisers favouring the finalists in each category over other service providers.
“Generally speaking, pricing is always important. From an adviser perspective, technical expertise and strong customer service support are key. Transparency and simplicity are always highly valued as well,” Andriessen says.
He points out the awards are necessary to SMSF service providers in helping them understand where their service is benchmarked against their competitors. “From the perspective of their customers and the end client, [the awards are] enormously important. It provides an evidence base to make decisions, rather than gut feeling,” he says.
Time in the market makes a difference
Argo Investments: Listed investment company winner
By Jason Spits
Longevity and low cost are the factors Argo Investments managing director Jason Beddow believes attract investors to the firm’s listed investments.
Having been set up in Adelaide in 1946, where its head office is still based, Argo Investments will celebrate 75 years of operation in 2021 with a market capitalisation of more than $5.4 billion and more than 90,000 shareholders invested through the firm.
Currently, 93,000 investors count themselves as shareholders, of which one-third of the total number are SMSFs, according to the organisation’s most recent analysis of its clients.
In a year of market volatility, the firm has seen an increase of 6000 shareholders, which Beddow says was not the result of any major changes in its offering or approach to investing.
“We have not done a lot in the past year that is different from other years because we know what we do is well trusted in a volatile environment,” he notes.
“We are also low cost at only 15 basis points and may not be a rocket ship compared to other firms, but we have been here for the long term.”
For the 2020 financial year, Argo had a net tangible asset per share of $7.27, earnings per share of 27.8 cents and full-year and fully franked dividends of 30 cents, which have remained relatively stable for close to a decade.
This performance is due to a diversified exposure to 85 stocks on the Australian Securities Exchange (ASX), of which the majority have been chosen for their returns and ability to pay fully franked dividends.
Being a listed investment company, Argo Investments can also offer dividend smoothing to create a regular distribution to shareholders looking for consistency in their investment income.
“One thing we try to achieve is fully franked dividends for our shareholders, and as interest rates fall and cash goes flat, dividends will play an important role in meeting income requirements,” Beddow explains.
He adds having a broad exposure, including the top 20 well-known stocks on the ASX, has provided that income and allows the investment company to retain its mandate to be fully invested with minimal cash positions.
This was a hard position to hold during the March and April market downturn as other investment managers moved to higher cash weightings, but it did allow Argo Investments to benefit from capital raisings in companies where it already held a stake, he says.
“There was an increase in capital raisings and they were coming off a low base as markets rallied, so they played out well for us and we have participated in 13 to date, and given our fully invested position, we were also able to participate in the upside as well,” he says.
The firm is confident it will continue to attract more interest going into its 75th year with its low barrier to entry of a $500 minimum investment, access via an online trading account and its history in the market.
“Anecdotally we know our long track record, Australian-based and trusted brand is attractive and those considerations are being elevated for investors at the present time,” Beddow says.
A focus on continual improvement
Accurium: Actuarial certificate provider winner
By Tharshini Ashokan
A combination of innovative soft ware, client support and education, all focused on providing the highest possible level of service, is what ensures SMSF actuarial services provider Accurium continues to stand apart from its competitors.
“We think we’ve got the most intuitive soft ware, which makes the process of ordering actuarial certificates quick and easy,” Accurium general manager Doug McBirnie says.
“We’ve got an excellent team of actuaries and SMSF experts in-house and on hand to provide technical support. Clients know that if they’ve got a question or they’ve got a problem, they can reach out to us and we’ll do everything we can and help solve it for them.
“As well as SMSF technical support, our clients also benefit from our extensive SMSF education offering. The Accurium TechHub is an online SMSF education portal that provides access to hundreds of hours of accredited CPD (continuing professional development) and best of all, for actuarial certificate clients, it’s completely free.
“I think it’s that combined package that keeps us as the market-leading actuarial certificate provider."
Accurium has built on these strengths, taking advantage of fewer changes to actuarial certificate requirements over the past year to focus on broadening its SMSF education offering via the Accurium TechHub.
“We’ve had the time to provide more content across a wider range of topics and through different media,” McBirnie notes.
“With the pandemic disrupting traditional face-to-face conferences and seminars, our online learning and CPD has become even more important.
“In the last 12 months, we’ve provided around 20,000 hours of accredited CPD to clients via our popular webinars.”
Accurium’s recent partnership with the SMSF Association as an accredited educator, announced in February, aims to further its shared commitment with the industry body to provide quality education to the sector and in particular its practitioners.
“That partnership allows us to provide more opportunities for our clients to obtain accredited CPD and build on the knowledge they need to service their clients,” McBirnie explains.
Another priority for the actuarial firm during the past 12 months has been to survey clients in order to focus on possible areas of improvement for Accurium’s soft ware.
“Continuous improvement has been our mantra over the last year. We sought feedback from clients and worked hard to make our systems as easy to use as possible,” McBirnie adds.
“Behind the scenes, we’ve also added further layers of protection to our already robust security system.
“We regularly survey our clients on our system and service levels and we’re delighted to say that our client satisfaction levels are the highest they have ever been right now.”
Enabling ease of use
ASF Audits: Audit winner
By Tharshini Ashokan
Providing clients with a smooth audit process through the use of automated systems facilitating ease of use is of paramount importance for ASF Audits.
“Having seamless SMSF audits is key and one way in which we deliver that is through our One-Click Audit technology. What we’re able to do is to provide advisers with a streamlined on-boarding process which provides them literally with a one-click facility to provide us with that information from either BGL 360, Class or SuperMate,” ASF Audits head of education Shelley Banton says.
“We have a client dashboard which provides them information in real time in the form of reports, queries and graphs, and they can track the progress of their audits along the way. It tells them to actually identify issues quickly and prioritise what they need to do a lot sooner.”
From an internal training point of view, it also means advisers can see what query areas they need to work on by being able to track the type of questions tending to arise repeatedly throughout the year. By highlighting those issues for advisers and their teams as areas that require more attention and improvement, audit queries can be reduced in the long term, Banton explains.
Further, she points out it is ASF Audits’ ability to combine its one-click, seamless approach to audits with the “human touch” of its service support for advisers that sets it apart from its competitors, especially during recent months with most people working from home due to the COVID-19 pandemic.
“The more we look at developing our technology doesn’t mean that it’s a onesided game for our clients because we still want to provide quality service where we put them first at all times. Technology doesn’t have to replace that aspect of our customer service,” Banton says.
“Making sure that we maintain those client relationships is something that is important to us as a firm, especially during this time when people are feeling a little bit more isolated than usual.”
In addition to prioritising a high level of client service and support, the firm strives to share the benefit of its SMSF compliance knowledge and insights with clients and the wider SMSF community, she says.
“We’re trying to help people in terms of improving their education and training in SMSF compliance, because that’s what [our team wants to] give back to our advisers at the end of the day,” she says.
“Being able to provide our clients and the industry with more insight and trying to respond to what the industry needs overall is really important, especially in terms of helping everyone work through the challenges of this pandemic.”
Scale and focus deliver stability
Charter Hall: Commercial property winner
By Jason Spits
Reflecting on 2020, Charter Hall head of direct property Steve Bennett believes financial advisers had reasons to be nervous before the coronavirus rewrote expectations for the year to come, but says his firm was ready for those circumstances.
“Advisers had to be nervous when considering cash and interest rates, and then more nervous as equities fell in March and April. They have bounced back, but there would have been worrying nights for some of them,” Bennett says.
He was more upbeat about the performance of his funds through the market downturn, stating the underlying valuations were stable and the funds remained resilient.
“The reason for this is that our property investments are underscored by the key thematics of long-term leases, high occupancy rates and institutional-grade investments for investors such as SMSFs,” he says.
“This has meant very low volatility in the property we focus on, which are typically unlisted Australian assets.”
He says the pandemic has demonstrated to Charter Hall’s investors the advantage of using a specialist property investment firm with sufficient scope to manage a portfolio, even when it is difficult to travel.
“Despite the travel restrictions, we had enough people on the ground to maintain good interaction with landlords, to consider re-leasing and the provision of relief, and we did much of that face-to-face, which allowed us to secure the best outcomes,” he explains.
While this personal approach was more difficult to take with tenants and investors, Charter Hall ramped up its communications with them and provided more detail.
“We did not make many changes to the business, but instead focused on greater levels of reassurance, including more frequent valuations of underlying assets,” Bennett says.
“For SMSF clients, we focused on educating people on why they had us in their portfolio and pointed to the low correlation to other asset classes and the low volatility we offer, and that has been well received.
“We have also focused on the income generated and in a time of lower interest rates and term deposits being close to zero, 5 to 7 per cent returns in the hand from our funds have been super attractive to investors.”
He reveals while there was a general move to cash by investors in the early months of the year, inflows to Charter Hall and its Direct PFA property fund have remained steady, boosted by quieter activity from its market competitors.
“Some of our competitors stopped participating in the property sector during the COVID-19 downturn, which unlocked deals we would not have had access to previously or that allowed us to get a better result for the fund because we had the ability to keep transacting throughout the year,” he says.
He also sees plenty of opportunity ahead driven by the conditions and new situations caused by the shift to working from home and a greater reliance on e-commerce.
“We are looking to gain a greater understanding of the tailwinds supporting the logistics and industrial sectors as more SMSF clients are seeking exposure to those,” he points out.
“People will only invest in what they understand and they invest in retail property because everyone shops, but with e-commerce there is a growing awareness of its value and purpose.”
Experience the key
CommSec: Australian shares winner
By Tharshini Ashokan
Australian equities remain one of the favoured asset classes for SMSFs. Further, their preference to access domestic shares directly makes the choice of trading platform very important.
In this year’s SMSF Service Provider Awards, CommSec won the Australian shares service provider category and in assessing its success, the Commonwealth Bank of Australia business arm has nominated two key characteristics.
Experience spanning two decades is one of these elements and its ability to provide up-to-date analysis for investors across the breadth of its product range is the other.
“CommSec has over 20 years of industry-leading service and experience, offering online and mobile trading solutions for customers whether they are just starting out or are an experienced investor,” the online stockbroking firm explains.
“Our customers are able to invest in Australian and international shares, including exchange-traded options, exchange-traded funds, hybrids and interest rate securities, and warrants, all with our unique range of benefits, including research, up-to-date analysis from CommSec experts and support.”
The firm also identifies the ability to provide access to investment offerings beyond its own direct services as a key driver to being so highly rated among SMSF advisers.
“Along with the benefits of our main platform, CommSec, as part of the Commonwealth Bank, provides SMSFs the ability to access a wide range of investment offerings within the banking group, keep across the latest market news, track SMSF portfolio performance and all with specialist support available at every step,” it notes.
Additional benefits, such as access to exclusive events for investors and first-look opportunities relating to upcoming initial public offerings (IPO) for equities and market research all help CommSec stand out from its competitors, it points out.
“Through CommSec, SMSFs may gain access to exclusive benefits, including invitations to investment events and webinars, early access to upcoming IPOs, complimentary access to premium research and alerts and direct access to our dedicated CommSec One service team for support,” it says.
Strength through technical support
Heffron: Administration winner
By Tharshini Ashokan
Heffron managing director Meg Heffron believes it is the technical support the organisation provides that sets it apart from other SMSF service providers.
“It just gives advisers confidence that they can handle anything their SMSF clients throw at them,” Heffron says.
During the past 12 months in particular, the company has focused heavily on helping advisers meet lodgement deadlines enforced by the ATO and other regulators – an essential requirement many in the industry have struggled with.
“We’ve made sure that not only are we industry leading, but that advisers have complete visibility over where things are up to and are actively engaged in the prioritisation of their funds. By midOctober nearly 40 per cent of our funds were either with our external auditor, with the client for signing or complete. In other words, neither the adviser nor Heffron had anything further to do,” Heffron explains.
“Our focus on meeting lodgement deadlines removes pressure on advisers. Because they’re at the pointy end, they’re the ones who deal with dissatisfied clients, get held up on their planning work because they don’t have the most up-todate figures or have to waste their time chasing work that should just get done.”
During the past year, the SMSF service provider has placed even greater importance on supporting advisers in an effort to help them meet their clients’ needs and their own education requirements in the midst of the COVID-19 pandemic.
“We’ve seen that the drain on advisers in terms of compliance work, helping their clients through COVID-19 and additional study means they are more time poor than ever,” Heffron notes.
“We’ve responded by making it easy to access our support in a multitude of ways. Over the last 12 months we’ve rolled out new SMSF Clinic discussion forums, online tools, including the Heffron Super Companion, and free webinars dedicated to major events impacting SMSFs, such as the COVID-19 superannuation measures and the federal budget.
“Our focus on education helps our clients earn valuable continued professional development hours and also provides ideas, strategies and practical updates from people who are recognised industry leaders when it comes to SMSFs. Our virtual events provide access to everyone, regardless of where they are based.”
Highlighting a growing interest in the SMSF sector, she says the future looks bright for advisers who are passionate about giving their clients insightful, strategic advice.
“We are seeing more and more inquiries from people considering setting up an SMSF. These people are distrustful of institutions, concerned about independence and want the flexibility to decide exactly who has their hands on their super. We’re also seeing advisers concerned about recommending super thanks to misdirected scrutiny from ASIC (Australian Securities and Investments Commission) and licensees,” she adds.
“We see a huge opportunity for advisers who genuinely want to give their clients great strategic advice in becoming SMSF experts, partnering with an administrator that understands their needs as well as everything sector related, to capitalise on this groundswell of interest from potential clients.”
A distinct value proposition
La Trobe Financial: Innovator winner
By Tharshini Ashokan
The ability to deliver products that match investor demand for income has been severely tested during these times of COVID-19-induced market turbulence, but non-bank lender and credit specialist fund manager La Trobe Financial has managed to deliver on its promises.
“Throughout the last 12 months of incredible market volatility due to COVID-19, La Trobe Financial’s portfolio products have each paid their advertised distribution rate on time and in full, and all maturity redemptions were also met in full. The stability of return over such a long period of time, including those periods of high market volatility over the past year, has strongly resonated with advisers,” La Trobe Financial executive general manager Michael Watson says.
The strength of the long-established La Trobe Australian Credit Fund, with $5 billion in assets under management, has helped the fund manager meet the needs of financial advisers looking for the best possible investment outcomes for their clients at even the worst of times, Watson notes.
“Thanks to the extraordinary resilience of this asset class, our disciplined asset selection approach and our dedication to creating diversified portfolios of highly granular, highly liquid assets, each portfolio product has operated with flawless liquidity and no investor losses,” he reveals.
“SMSF investors have a pronounced need for low volatility and repeatable income products. There has been no time in modern history when this has been more difficult to achieve. Accordingly, financial advisers have an imperative to find solutions that meet these needs. Products that offer a distinct value proposition, while delivering transparency and simplicity of structure are increasingly important to advisers and investors.”
In addition to a strong product offering, the fund manager also prides itself on the ability to provide advisers with a consistently high level of portfolio disclosure.
“Transparency and disclosures are crucial for financial advisers to fully understand an investment strategy and relay the strategy to their clients while making informed investment decisions,” Watson points out.
“In 2020 La Trobe Financial further enhanced its monthly market reporting to what we believe is the highest level of whole-of-fund disclosure in the funds management industry.
“The increased level of transparency has resonated with advisers, particularly as it coincided with a period of almost unprecedented market volatility. Great confidence can be taken from La Trobe Financial’s standard disclosures alone, which are updated monthly and available for the world at large to view on its website.”
He believes the importance La Trobe Financial places on disclosures will serve the fund manager well, as fund performance alone will not be enough for advisers in the long term.
“The future of funds management will focus on more than just fund performance. Fund managers must commit to providing full disclosures around their investment strategies, asset selection and portfolio allocations. Such disclosures allow financial advisers to fully understand and engage with a strategy before including it in investor portfolios as part of an overall portfolio construction strategy,” he explains.
Structured for the long term
Magellan Financial Group: Infrastructure winner
By Jason Spits
Investing in the intangible generated by the physical is how Magellan Asset Management head of infrastructure Gerald Stack views infrastructure investing.
The Magellan Infrastructure Fund invests in regulated utilities and infrastructure that delivers goods, people and data, that is, the capital equipment providing intangible but necessary services across the country.
“The definition of infrastructure is important because different managers have different views,” Stack says.
“The magic for us is the nature of our investments, which have reliable earnings, low risk and good cash fl ow. They are not get-rich-quick investments, but are a longterm play which resonates with investors and advisers.” According to Stack, the fund, which is available via platforms and as an active exchange-traded fund on the Australian Securities Exchange, absorbed the impact of this year’s market downturn without much difficulty, despite investments in physical infrastructure taking a hit due to the COVID19-related slump.
“Our utilities investments were mainly unaffected and communications infrastructure, such as mobile and broadband telephony, remains a strong fundamental story,” he reveals.
“Transport investments were down because of the pandemic and lockdown, but have since recovered and we have moved away from airports and toll roads to higher levels of cash and utilities, but will return to airports because people will want to travel again.”
He sees the impact of COVID-19 as a one-off event and says as a manager working through the current period, it is still looking three to five years ahead.
“Infrastructure will continue to deliver reliable and predictable returns, probably inflation plus 5 per cent is a good expectation, split equally between yield and capital growth. There is no real reason that should change as these are assets that provide essential services,” he says.
“Under our definition we strip out anything with unreliable earnings or too much risk, such as a high exposure to China, commodity price sensitivity or things which face competition, which is not a great thing for infrastructure.
“We are looking for monopolies in regulated markets that are providing essential services.
“We are happy with regulation. It is a friend and not an enemy because it gives confidence in the nature of returns over time.
“We see no reason to believe the underlying rationale for investment in infrastructure will change and if we look at it in a few years’ time, we should see the returns over the three to five-year period we expect.”
He recognises SMSF investors investing in infrastructure are continuing to look for low volatility and reliable income streams, as well as a yield in the current low interest rate environment.
“In that regard, they are not too different from other investors and they are common themes. Infrastructure is delivering a regular yield of 3.5 per cent and it is reliable, so they can be confident of growing their wealth by investing in it,” he says.
“We have continued demand for our fund offerings and have grown the funds under management over the past one, three and five-year periods, and we have seen an increase of inflows during COVID-19, so it would appear people are continuing to allocate funds to infrastructure and underlying demand remains strong.”
Close to clients
PIMCO: Fixed income winner
By Jason Spits
Assisting advisers in having conversations about fixed income investments with clients, particularly during the COVID-19-induced market downturn, has played a large part in PIMCO’s win in the fixed income category in this year’s SMSF Service Provider Awards.
PIMCO head of distribution for global wealth management Brendon Rodda sees the ability to leverage a global brand, combined with a local presence, has allowed the investment manager to get close to its adviser and investor clients.
“Helping advisers to have an informed discussion with their clients around fixed income has resonated with them, and in the last six months that has become even more important,” Rodda says.
“Like other managers, we pivoted to more digital offerings in our communications and events during COVID-19, which allowed us to actually increase the level of interaction with advisers. We expect this will remain a part of our engagement model even aft er this period.”
According to Rodda, PIMCO has been able to get close to clients and help them identify what gaps they have in their portfolio when it comes to fixed income investments.
“For the past 12 months we have been looking at market dynamics and recognising the need for income is growing. Our role is to offer strategies that meet those needs.”
He says it was this need for a wider range of income solutions that encouraged the firm to launch a local version of its flagship PIMCO Income Fund into Australia in late 2015, eight years aft er it started operation in the United States. Since that time, the fund – which is available as a wholesale offering and via the Australian Securities Exchange’s mFund service – has returned 4.76 per cent net of fees and continues to pay steady monthly distributions.
Given the current low rates of return for cash and reduction in dividend payments, Rodda sees the future of SMSF investing as including more diversification, including a greater focus on bonds and increased interest in income-returning investments.
“Diversification will be a driver of change in a portfolio, but it is important for investors to understand the role bonds play and where they sit on the spectrum of incomeproducing investments,” he explains.
“In addition to traditional funds, we are seeing interest in active listed income from listed investment trusts and exchange traded funds.
“We are also starting to see more interest in using credit in portfolios, although we would always caution investors to keep in mind the associated volatility, and the importance of focusing on quality in this space.
“This comes back to one of our key roles: helping people understand the asset class and how to use it, as well as what the risks are.
“That’s why we remain focused on working with advisers to help them have conversations with their clients and to align their needs with our offerings. It might not sound exciting, but at end of day we are here to help our clients help their clients.”
Three drivers of success
Topdocs: Trust deed provider winner
By Tharshini Ashokan
For the Topdocs team, the ability to recognise and deliver three key factors driving advisers’ decisionmaking when it comes to choosing a trust deed provider – namely, quality of documentation, automation and support – is the key to its success.
Producing high-quality documentation allowing advisers to meet necessary regulatory and legislative requirements as they continue to evolve, while ensuring they can rely on technical and legal assistance when required, is essential in the SMSF space, Topdocs director Michael Spakman says.
“The other big driver we see is automation and the ability for advisers to push and pull client information from their soft ware applications and service providers to streamline their administrative process,” Spakman says.
“Our integrations with soft ware vendors such as BGL, Class, SuperMate and XPM ensure our advisers can pull data from their soft ware into our order forms, and our integrations can then push new entity data back into the advisers’ soft ware, greatly reducing admin time.”
In addition to meeting these adviser needs, the firm has also placed a priority on providing new products and solutions to support clients grappling with the effects of the COVID-19 pandemic.
“Among the new offerings we have put in place during this period were free access to a range of COVID-19 relief documentation for SMSFs to advisers Australia wide to help them support their clients in a cost-effective way, and to provide a range of new document delivery options for our clients to support their working-from-home arrangements,” Spakman says.
“These new offerings were received very well by our customers, who I think could see our desire to provide extra support for them during this time.”
He highlights the company’s flexibility during the pandemic as an important aspect of its ability to continue meeting clients’ needs during this particularly turbulent time.
“Ensuring our turnaround times have never wavered, that our delivery options have been expanded and that our support team is always available during the COVID pandemic has, we believe, meant our clients have felt supported during their work-from-home arrangements in particular and has assisted them to get on with their work effectively,” he notes.
With the recent launch of its SMSF Compliance Suite, a service intended to give advisers unlimited access to best practice legal documents, Topdocs intends to continue providing the highest possible standard of support for advisers as the level of scrutiny of SMSF documentation by the ATO and auditors continues to increase.
“We see this service not only providing advisers with a cost-effective way to ensure their SMSF documentation is up to date and compliant, but to assist them to streamline their audit function, particularly with the upcoming changes due to the auditor independence standard changes,” Spakman says.
“With more frms needing to outsource the audit function from their fi rm, having consistent and up-to-date documentation as provided by this service will assist those firms to make the audit process a lot smoother and likely cost-effective.”
Assisting portfolio diversification
Vanguard Australia: International shares products and ETFs winner
By Tharshini Ashokan
Financial advisers looking for broad diversification at a low cost know they can rely on Vanguard Australia’s range of international shares products and exchange-traded funds (ETF) to build up their SMSF clients’ portfolios.
“All of our offerings can be used to provide more diversification at a really low cost for the core of investment portfolios and then advisers can actually leverage satellite holdings to complement the core,” Vanguard Australia head of intermediary Rebecca Pope explains.
Pope points out this is particularly true of how advisers use Vanguard’s range of ETFs and international share funds as a way to reduce the home-country bias evident in so many portfolios, helping to improve portfolio construction outcomes for investors and advisers who prefer to outsource their international exposure.
“We’ve always positioned Vanguard each year as core building blocks for portfolios and that continues to resonate really well with advisers. Our trusted reputation, our low tracking error and the well-diversified and cost-effective ETF lineup has really supported this,” she notes.
“The importance of time in the market as opposed to not timing the market really continues to help advisers make the right choices when it comes to choosing the most appropriate ETFs to help meet their clients’ needs.”
The company also places great importance on assisting advisers in their effort to provide clients with the latest investment knowledge and insights.
“We’re constantly looking at ways we can continue to support advisers and meet their needs, and help advocate for the value of advice,” Pope explains.
“Each year we partner with Investment Trends to produce probably one of the most comprehensive reviews of the Australian SMSF trustee and adviser market, and this enables us to provide some really great insights back to the adviser market with a view to supporting the growth of their own SMSF client base.”
According to Pope, the report’s coverage of product preference and trends and the demand for advice from SMSF investors, as well as key themes resonating with the industry and factors affecting the SMSF market, has proven to be invaluable for advisers.
Advisers also value Vanguard’s broad range of market and economic commentary, and its research into portfolio construction and asset classes for helping them educate their own clients.
“We’re in the process of building out an adviser offer team, which will give our advisers access to specialist expertise, such as practice development management, education and investment specialist support, as well as implementation support,” Pope reveals.
“That’s a new function that we’re building out that we hope really adds incredible value to our advisers and also their clients in future.
“We’re always looking at different ways to advocate for advice and making sure that we do have all of those core building blocks in place for advisers. We continue to focus on our team to upskill them so they can continue to support advisers as well and their clients.”
A long record of certainty
Zurich: Insurance winner
By Jason Spits
Surety is the central idea that runs through life insurance and Zurich Life head of sales Nathan Taggart sees the backing of a global organisation and a strong claims record as key parts of that offering in an Australian market in a state of flux.
“We seem to be heavily considered because of those factors, but once an adviser has made a choice to use Zurich, they are also looking for good services and the ease of doing business for them and their clients,” Taggart says.
“We know there is more demand for these things and we have created adviser portals with a focus on efficiency and speed of completion that allows advisers to selfservice and navigate through our channels as an insurer.”
According to Taggart, ongoing development and expansion of its client and adviser portals will benefit a range of advisers and their clients, including those in the SMSF space.
“We have made a heavy investment in those portals and so continue to make enhancements so that advisers can monitor and maintain their client books and the progress of underwriting and claims,” he reveals.
“We have also aimed to make looking aft er existing clients as easy as it is to onboard new clients and have invested heavily to improve our ongoing service provision.
“This has included how we handle claims, which is still the biggest promise we make to customers.”
He predicts Zurich is well positioned to handle underwriting and claims arising from the uptick in life insurance inquiries ever since the majority of people began working from home due to the coronavirus shutdown.
“Given the strength of our brand, we actually saw strong interest in life insurance and Zurich and with that awareness people were asking themselves where they could turn,” he says.
“They were looking for known brands, and that assisted us because they knew we are in this for the long haul and we remain one of the longest-serving branded insurers in Australia.”
Under its life insurance business, Zurich Financial Services Australia runs two brands, being Zurich Life and OnePath, the latter purchased from ANZ in mid-2019, and Taggart says the two brands both have strong appeal and recognition in the market.
“SMSF trustees respect them and the reason they resonate is the products are appealing and have longevity in the market, which creates a lot of goodwill,” he explains.
Much of this goodwill has also been generated by the organisation’s efforts to promote the value of life insurance and financial advice, despite not having a related financial advice business as some of its market peers have.
“We have gone big in the advice advocacy space and released a number of white papers and research papers detailing the need for advice and insurance and the benefits of those,” Taggart says.
“We have backed those up by working on issues around the cost to serve for advisers and also built an adviser education offering, offering 80 hours of continuing professional development.
“The education is offered online and on demand and is mapped to the standards, code of ethics and exam set out by the Financial Adviser Standards and Ethics Authority.
“The education portal does offer life insurance content, but also offers wider financial advice content for all advisers.
Other winners
Macquarie: Cash and term deposits winner
Macquarie Wrap: Investment platform winner
Macquarie: Residential property loans winner
BGL Corporate Solutions: SMSF accounting/ administration soft ware winner
The full list of the winners is available here: https://smsmagazine.com.au/news/2020/09/10/top-smsf-service-providers-for-2020-announced
