Mainstream loses super fund contract

A superannuation fund has terminated its administration contract with Mainstream after it announced plans to merge with a larger super fund in July.

Combined Super has filed a termination notice with Mainstream Group Holdings ahead of its intention to merge administration with Prime Super's incumbent service provider.

Prime Super's administrator is Australian Administration Services while its custodian is NAB.

If it goes ahead, the merged entity would manage about $5 billion in funds and would see a number of Combined Super directors appointed to the merged board of Prime Super.

Financial Standard reported the possibility of merging funds shuffling their admin/custody services vendors last month in its annual custody feature.

Mainstream will receive administration fees from Combined Super until 18 March 2019, as per the six-month notice period.

The administrator said the Combined Super contract was less than 5% of the group's revenue in FY18.

The loss will not have material impact on FY19 earnings, which have been maintained at $50-55 million for FY19.

Mainstream expects to make up any shortfall in FY19 revenues with the strong pipeline of sales in US and Australia.

Last month Mainstream announced plans to enter the SMA market.

Read more: USCombined SuperPrime SuperAustraliaAustralian Administration ServicesFinancial StandardMainstream Group HoldingsNABSMA
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