LUCRF Super is the latest addition to the growing stable of clients at leading asset consultancy Frontier Advisors.
The $6 billion superannuation fund becomes the fourth new retainer client appointment for the firm this year, along with a further four superannuation funds that have recently subscribed to its award winning Partners Platform technology offering.
In a sector where new asset consultancy appointments are far from common place, this period marks the strongest growth for the firm, in terms of new engagements, since the early years of Frontier’s twenty three year history. Frontier’s client portfolio of industry superannuation funds, now also includes a range of charities, universities, public sector organisations, insurer’s and industry group foundations and trusts. “Non-super” organisations now comprise over 40 per cent of Frontier clients.
In the last six months Frontier has added the University of New South Wales, dairy industry body the Gardiner Foundation, local government insurer MAV Insurance, and most recently LUCRF Super to its books. Frontier has also been successful in recently gaining reappointment through competitive tender processes from Monash and Deakin Universities.
These additions join GESB, Catholic Super, Hostplus and a family office investor as new standalone subscribers to sign up to the Frontier Partners Platform in 2017.
Frontier CEO, Damian Moloney, explained the recent client additions not only add depth to the firm’s client base but also extend the dimensions of the type of organisations working with the highly regarded practice. “Whilst the industry fund sector still provides the core of our client base, the addition of these different types of businesses is a reflection of the quality and experience of our consulting team and the flexibility and customisation our service model provides.
“While the broad fundamentals remain the same for any institutional investor, the ability to tailor solutions around issues such as liquidity profiles, taxation treatment, ESG considerations, capital preservation and differing philosophies around risk, is where consulting offerings are differentiated.
“And perhaps the key differentiator, is advice that is free of conflicts relating to the provision of products. There’s no doubt the fact Frontier is the last of the major firms to resist the temptation to earn revenue from our clients via product provision is an important factor for many investors”, said Moloney.
The issue of independence in the provision of advice has been attracting a lot of attention in the United Kingdom with the Financial Conduct Authority (FCA) referring conflicts of interest with vertically integrated business models of investment consultancies that also provide fiduciary management to the Competition and Markets Authority. The results of that review may well be instructive for the asset consultancy landscape in Australia, something Frontier will be eagerly anticipating.
Moloney agrees with the tenor behind the FCA’s request for an investigation into independent advice. “There are a number of key areas where Frontier has been a vocal campaigner for the best interests of investors. Fairness in fees and conflicted advice are perhaps the two most prominent of these issues. We think the alignment of the interests of both asset owner and advisor are critical and increasingly we see investors coming to the same conclusion.”
Frontier believes it is well positioned for any future shifts in the asset consulting sector whether that comes from a focus on the appropriateness of vertically integrated business models or further increases in building internal capability within asset owner teams.
“We’ve been planning for several years to be ahead of the curve when it comes to the changes facing our sector. We’ve changed the nature of our consulting team and grown our numbers while investing heavily in technology that supports the changing demands and sophistication of the market. Although our staff numbers are currently at the highest level in the firm’s history, there is a limit to the number of clients we would take on as we don’t want to lose the ability to offer customised advice within a nimble and connected team structure”, explained Moloney.
For further information on the Financial Conduct Authority’s market investigation reference see this link: https://www.fca.org.uk/news/press-releases/fca-makes-market-investigation-reference-investment-consultancy-services?twitter