Publication: IFA

Date: 6 December 2010

Written by: Kate Kachor

Addwealth develops own super fund

Dealer group Addwealth has developed its own superannuation fund as part of an attempt by the firm to bridge the gap between self-managed superannuation funds (SMSF) and industry superannuation funds.

"I think we are filling a gap between self-managed super funds and industry super funds," Addwealth chief executive Paul Foster said.

The Addwealth Advantage Super Fund was launched last month, prompted by risk adviser demand and a lack of efficiency within the wraps and platforms sector, Foster said.

He said with a large number of advisers within its network focusing on risk as their first peice of business, Addwealth had to provide its advisers with a large number of insurance-based platforms. The result turned the focus on the businesses need for greater efficiency. "It's about efficiency. I find wraps and platforms have had quite a bit of bad press and some of it is deserved, but because the advisers haven't used them efficiently," Foster said.

He said the dealer group intended to approach its existing client base with the option of rolling over into their super fund, though he would not force any clients to make the move.

There will be as many as 1500 clients over the course of the next two or three years that we will review and if it is the right thing, we will suggest moving," he said.

He said the firm's investment options were initially quite narrow, with Macquarie as the firm's preferred cash manager and UBS managing the fixed interest option.

"We've got our Addwealth Achiever Fund for the growth element and that's where we are starting with," he said.

"We'll then add investment options where we need to, but we do want to keep that side of it simple."

The dealer group had outsourced its trustee duties to CCSL and had adopted a contribution fee of up to 5 per cent, he said.

He said the super fund would be operated on a fee-for-serivce fee base. "I'd like it to be super competitive with industry funds on fees. I think it will be for smaller balances initially, say up to $50,000. Any cost savings we will ultimately pass on," he said. <<

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