Agency Blog

The Rapid Transformation of the Superannuation Sector The Australian superannuation industry is undergoing a period of rapid transformation, driven by consolidation, regulatory shifts, and the internalisation of investment management. As of the September 2024 quarter, total superannuation assets reached $4.1 trillion, reflecting a 3.7% increase over the quarter. This growth underscores the sector’s critical role in both domestic and global financial markets.   Regulators such as APRA continue to advocate for consolidation, deeming funds with less than $30 billion in assets “uncompetitive”. This has resulted in significant mergers, including the formation of Aware Super from First State Super and VicSuper in 2020 and the creation of the Australian Retirement Trust (ART) from Sunsuper and QSuper in 2022. Consequently, five mega-funds—AustralianSuper, ART, Aware Super, UniSuper, and Hostplus—have emerged, with others like HESTA, Rest, and Cbus poised to follow suit.   Internalisation and the Demand for Skilled Talent With consolidation and asset growth, superannuation funds are increasingly internalising investment strategies. Rather than outsourcing, they are adopting an asset management model, directly handling portfolios, and expanding into global markets. This shift has prompted the establishment of international offices in the UK and the US to access investment opportunities in infrastructure, real estate, private equity, and private debt. As these funds scale, the demand for skilled professionals has intensified. Keegan Adams Recruitment plays a strategic role in this evolution, supplying top-tier talent across investment management, project management, ESG, operations, risk, and compliance. Our expertise ensures that superannuation funds build high-performing teams capable of driving innovation and operational excellence.     Technology and Operational Uplift To manage increasing complexity, superannuation funds are investing in advanced technology platforms and operational infrastructure. Legacy systems are being phased out in favour of digital-first solutions that improve member engagement and streamline fund management. A key concern is ensuring super…

The Australian funds management distribution market is experiencing significant transformation as we move into 2025. In the face of evolving industry dynamics, fund managers are contending with a declining financial adviser base, institutional market consolidation, intensifying competition, fee compression, and shifting investor preferences. This update delves into the key trends, challenges, and opportunities shaping the market, offering actionable insights on how fund managers can adapt and succeed in this changing environment.   1. The Shift to Direct-to-Consumer Models One of the most pressing challenges for fund managers is the continued decline in the number of financial advisers in Australia, which has dropped below 16,000, according to the latest Wealth Data figures. This reduction has prompted fund managers to explore direct-to-consumer (DTC) distribution models, mirroring trends observed in other global markets. The shift to DTC requires fund managers to establish direct relationships with investors and offer seamless, high-quality digital experiences that align with the growing demand for consumer-grade interactions. To compete in this evolving environment, fund managers must enhance their digital capabilities and tailor their offerings to effectively engage and retain investors. Reference: https://www.moneymanagement.com.au/news/financial-planning/how-much-could-adviser-numbers-grow-5-years   2. Superannuation Fund Mergers and Market Consolidation The Australian superannuation market is undergoing continued consolidation, driven by external pressures such as cost-efficiency mandates and the performance benchmarks introduced under the Your Future, Your Super (YFYS) legislation. This trend is expected to result in a market dominated by a few large mega-funds, making fund managers to adapt their strategies to align with the preferences of these dominant institutions. To remain competitive in this evolving environment, fund managers must prioritise scale, efficiency, and performance. By doing so, they can remain competitive in the evolving environment.   3. Managed Accounts: Growth and Adoption The rapid growth of managed accounts is reshaping the Australian funds management distribution market. According to…

In 2024, the Australian investment and wealth management industry is navigating a period marked by changing market conditions, regulatory shifts, and evolving workforce expectations. Bonuses and salary increases have become critical factors in attracting and retaining top talent, especially as firms strive to balance performance incentives with cost management amid uncertain economic landscapes.   Trends in Bonuses Bonuses have historically played a significant role in the investment and wealth sector, rewarding high performers for achieving key financial goals and enhancing client satisfaction. In 2024, however, many companies are re-evaluating their bonus structures. While bonuses remain attractive, there’s a growing emphasis on tying rewards more closely to individual, team, and firm-wide performance metrics, which could include global performance. This shift aims to foster a culture of accountability and to ensure that compensation packages align with the company’s global financial health. In high-demand areas such as private equity and asset management, salary and bonus has been a regular topic through 2024.   Salary Increases in 2024   The tight labour market and increased competition for certain skillets have put upward pressure on salaries in 2024. In response, many firms awarded salary increases to retain key employees and to attract new talent, resulting in a lower allocation of overall budgets for less staff. This is particularly notable in Melbourne and Queensland, where lower volumes of talent create more demand for experienced talent. Early-career professionals that began careers in the last 2-3 years have seen above market entry salaries, which have been marginally increased and still higher than more norms prior to COVID.  These employees, often drawn to the sector for its growth potential, often have an expected salary growth to match their career progression. Therefore, we have seen younger employees more inclined to switch firms for higher pay if career growth seems limited….