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Few barriers to entry, no barriers to exit
So far as Rollover can recall, one of the biggest factors to have influenced the consolidation of the superannuation industry over the past two decades has been both regulation.
Thus, your correspondent was more than a little amused to read the Australian Prudential Regulation Authority’s (APRA’s) submission responding to the Productivity Commission’s issues paper on superannuation efficiency and competitiveness.
In circumstances where plenty of superannuation funds have disappeared from Super Review’s old Top 100 superannuation fund list and only four have been added, Rollover was particularly taken by APRA’s declaration that “the superannuation sector continues to consolidate and it is likely that further consolidation may promote efficiency without unduly impacting competition in the sector as the superannuation sector remains far less concentrated than other APRA-regulated industries”.
The APRA submission acknowledged that “there have only been four new RSE licences granted in the past five years”, and Rollover rather likes the fact that APRA does not think this is because of any barriers preventing the entry of superannuation funds.
But at least the regulator did refer to the fact that in the absence of a distribution channels such as bank clients of union members, new entrants might find the going a little tough.
AUTHOR
The Rollover
Rollover is a jaded hack who joined the staff of Super Review nearly two decades’ ago and never managed to summon the energy to leave. Known throughout the superannuation industry as a power-luncher and gossip, Rollover spends his time humouring fund managers, eavesdropping at conferences, dozing through briefings and looking for his next free meal.
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