Future Group confirms more mergers ahead, undertakes review

Future Group is growing again, taking on the Zurich Master Superannuation Plan and a small MLC product.

The Zurich Master Superannuation Plan will be merged into the Smart Future Trust alongside the MLC Insurance Only product that currently sits inside an Insignia Financial fund.

Equity Trustees serves as trustee of both the Smart Future and Zurich offerings and, following a review, decided Zurich members would be better off if transferred into a larger fund. In making the decision, Equity Trustees considered "investment performance, cost efficiencies, member services, and the strategic direction of the Zurich Fund."

It said that after doing so, it was satisfied that transferring members to smartMonday PRIME, a product within the Smart Future Trust, was suitable. Upon completion, the Zurich branding will be abandoned.

The Zurich Master Superannuation Fund, which was established in 1994, has close to $800 million in funds under management, held on behalf of 7500 members.

Meantime, MLC Insurance Only is used by about 97,000 members to fund life insurance premiums in a tax-effective structure. It also has superannuation accounts with funds under management totalling about $200 million.

The insurance policies for these members that are transferred, which are held through Acenda (formerly MLC Life), will retain their existing terms and conditions. They will go into a new Acenda Division within the Smart Future Trust and Acenda will remain as policy administrator.

The two will also partner to keep Acenda's on-sale retail risk products available to financial advisers and their clients.

"We have built a strong relationship with Acenda and are looking forward to a long-term partnership with both Acenda and their parent company in Japan, Nippon Life," Future Group said.

The Smart Future Trust has close to $6 billion in assets. This is currently spread across more than 20 different products, primarily corporate offerings. In total, there's more than 60,000 member accounts tied to the Smart Future Trust - and soon to be even more.

Financial Standard recently reported Future Super and Verve Super will soon be merged into the Smart Future Trust as well. This would add a further $2.7 billion to the total FUM.

The Zurich transfer is expected to take place on June 6, while the MLC transfer will be completed on July 1.

"With our focus on centralising operations and creating a highly efficient superannuation platform across multiple brands, these transfers demonstrate that we are a favoured destination for funds looking for a home for their super and insurance offerings and ensure members are well served," Future Group chief executive Simon Sheikh told Financial Standard.

"Combined, these transfers will see funds under management grow by just under $1 billion while increasing the number of members we serve to just under 500,000."

At the same time, the group is undertaking a review of its operations and extensive insurance arrangements, which largely differ from product to product within the Smart Future Trust. The trust currently has mandates with several insurers, including AIA, MetLife and Zurich.

Future Group is consolidating its insurance offerings from 10 to four and closing several of its legacy investment options. Future Group said this has resulted in the need to transfer some members with complex insurance needs to a more appropriate super fund.

As part of the insurance rationalisation project, Future Group is currently completing a tender process for its insurance offerings, with the aim of appointing a single provider. The outcome of this process will be announced in due course, it said.

"This is in line with our business strategy that saw us recently undertake product simplification to ensure a streamlined operating model. We are transitioning the business to be a digital first fund with a simplified product model, and focusing on clients aligned to this way of operating," Sheikh said.

"Future Group is now well positioned to offer a leaner corporate superannuation product for the market. This streamlined offering will retain much of the flexibility required for corporate superannuation partners, whilst stripping away the administration complexity that would traditionally be associated with corporate super."

Future Group is also home to the Guild Retirement Fund, which includes Guild Super and Childcare Super. Upon completion of the Zurich Master Superannuation Fund and MLC Insurance Only transfers, Future Group will oversee a total of more than $17 billion in assets.