Superannuation funds will benefit if they can gain a comprehensive perspective on their assets.

Peter Sherriff, director of Product Strategy (Asia Pacific) at Charles River Development, explains why the ‘whole-of-fund’ approach is gaining popularity across Australia.

Superannuation funds will benefit if they can gain a comprehensive perspective on their assets.

Peter Sherriff, director of Product Strategy (Asia Pacific) at Charles River Development, explains why the ‘whole-of-fund’ approach is gaining popularity across Australia.

Peter Sherriff
Peter Sherriff

Director of Product Strategy, Asia Pacific, Charles River

Peter Sherriff Peter Sherriff

Director of Product Strategy, Asia Pacific, Charles River

Recent years have seen a shake-up in Australia’s superannuation fund industry. Regulatory scrutiny and the growing expectations of members, combined with a flurry of mergers and steady organic growth in the size of funds, have motivated fund managers to better understand what the whole of their fund looks like.

What is ‘whole-of-fund’? Simply put, it is the entire pool of assets, regardless of how that pool is broken down into fund-member products. It spans all public and private market assets, whether managed internally or by external asset managers.

In this article, we explain why a ‘whole-of-fund’ view will give managers better investment decision-making and reporting than when assets are monitored individually, using historical data. We also discuss how it can help funds meet the regulators’ demands.


Benefits for Investment Managers

A comprehensive view allows investment managers to know, at the start of the day, what their exposure looks like across all asset classes at a specific time. It thus enables them to identify exposures and concentrations across the investment book.

The recent banking sector turmoil, which led to the demise of Credit Suisse and Silicon Valley Bank among others highlighted the importance of obtaining an accurate view of market exposures in real time. In times of market volatility, it is critical that managers identify their total exposure across the investment book so they can take decisive action.

Having a ‘whole-of-fund’ view on one investment management platform allows managers to undertake a meaningful set of stress tests and scenario models across a book of assets.

In a siloed approach, different members of the investment and investment operations teams transfer information between multiple systems, where there are potentially different communication channels for a variety of asset classes. However, the ‘whole-of-fund’ view is more efficient from an operational perspective. It eliminates inefficiency and brings information onto a single platform, addressing operational risks and inefficiencies across the business.


Benefits for Compliance

A ‘whole-of-fund’ view will be ideal for other parts of the business, including compliance. This is timely because, in recent years, regulators pushed for greater transparency from funds, particularly around private assets. In turn, regulatory demand has increased for a single source of updated and accurate information.

The need for clarity in investment data is continuing to provide increased transparency and visibility at the most granular level to support the regulatory side of things.

No matter how many new regulatory reporting requirements are introduced in the future, it will be easier for funds to meet requirements if they have a ‘whole-of-fund’ view rather than a fragmented picture provided by siloed systems.


Benefits for Fund-member Relationship

If funds can get better access to relevant data and thus gain more confidence in the timeliness and accuracy of that data, they will be able to enhance member engagement.

Providing more information in a user-friendly and increasingly mobile way is important for members, particularly younger members, who are going to be the future of the inflows into these funds.

Members want to understand where their money is invested and whether it aligns with their personal beliefs and value systems. So, being able to provide that information is critical for funds if they want to get their members engaged and create a sense of loyalty.


Beyond the Hype of New Technology

The need for a real-time ‘whole-of-fund’ view has been a regular topic of conversation among super funds in recent years, as a growing number of senior managers recognise its potential value. Adopting a new approach is not straightforward, however, and some have found the process to be problematic.

We are confident that implementation challenges can be overcome. We are seeing more and more clients achieve true start-of-day exposure for their funds across their public, private and internally and externally managed assets. The direction of travel is clear.

We recently discussed the ‘whole-of-fund’ approach in super funds in a podcast with Garry West from the Australian Institute of Superannuation Trustees (AIST). Our discussion included why superannuation funds are shifting towards this approach and how it can help funds extract better insights from the growing volumes of portfolio, market and reference data generated across their investments.


To learn more, listen to the podcast.

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