The superannuation industry is going through a tremendous amount of change, which is evident in the number of times new legislative modifications are discussed by parliament, in reporting done by news agencies, and in the real changes in stance with additional litigation by regulators, LGIAsuper CEO Kate Farrar explains.
But even more evident, though, is her passion for the industry. Kate shares that half of her working life was spent in financial services and the other half in electricity, probably the two most disrupted markets in Australia. This experience afforded her a big-picture view that couldn’t have been achieved without putting in the years of hard work.
“I not only have the investments and market risk management orientation, which is obviously of critical importance to delivering great super products to our members, but I also have had the experience of running a business in an environment that is deregulating and being disrupted at a rate of knots. It’s just what I do,” she says with a grin.
And in light of her most recent achievements, it appears she certainly does it well. When Kate first signed on with LGIAsuper in 2018, there were two central opportunities she saw for taking the organisation forward. The first was to reduce the cost per member and the second was to scale up.
“It was clear that we needed to undertake work on the organisation to make it fit for the future and a real survivor in a consolidating market,” Kate says.
“First, we dramatically reduced our cost per member by undertaking a unique partnership to deliver outsourced administration and IT services. This alone reduced our cost per member by 30% and basically halved our cost of delivering admin services.
“We have also worked really hard on our investment portfolio, creating better performance across some of our single-asset class options, for example. And the last thing we did was assess the need for merger partners.”
Our personalised ‘LGIAsuper essence’ delivers great value in terms of education and advice, supporting our members as they travel through their retirement journey.
This process ensured that when merging, LGIAsuper would maintain its unique value proposition – a signature boutique offering that allows for face-to-face interactions with its members, particularly those in the workplace.
“Our personalised ‘LGIAsuper essence’ delivers great value in terms of education and advice, supporting our members as they travel through their retirement journey. We had to make sure we didn’t lose that,” Kate stresses.
So with this core element guiding the search, LGIAsuper easily found its way to Queensland funds Energy Super and Suncorp Super, making Kate two-for-two in conquering the goals she set out to achieve at the start; even if it did make for a rather exciting and even exhausting few months.
“I’m at my best when I’m under pressure,” she admits. “That being said, I wouldn’t necessarily recommend that people seek to do two SFTs and acquisitions at the same time. It definitely made for quite a big three months.
“But, of course, I believe you have to take the opportunities when they present themselves. And I’ve been really proud of how keen the whole organisation has been to take on opportunities like this when they arise to deliver great outcomes to members.”
A lot of it comes down to LGIAsuper’s culture. Kate credits it as one of the organisation’s greatest assets. As such, she believes it’s more important than ever to keep it intact as the companies merge.
“As we set up the merged executive leadership team for the fund, I’ve been very intentional to try and bring in team members with a variety of backgrounds so that we are able to retain the rich pieces of culture that come from each of those predecessor organisations,” she explains.
“I find that if you work hard on bringing together teams with different perspectives and diverse backgrounds, then that’s what gives you the great outcomes and the leverage to deliver into the future.”
According to Kate, it’s just as vital to create strong, collaborative business partnerships. “In this modern world, no single company can deliver everything without working with other companies. You need specialist expertise, and you simply can’t afford to have it all on your own,” she expresses.
I find that if you work hard on bringing together teams with different perspectives and diverse backgrounds, then that’s what gives you the great outcomes and the leverage to deliver into the future.
“I really love the idea of a sort of hub-and-spoke delivery model where the member is at the centre, and we surround the member with all of these wonderful service offerings from our partners, bringing them all together.” In fact, Kate credits National Australia Bank (NAB) as key to its recent double merger success.
“We’ve had to put a fair bit of pressure on all of our providers just through the velocity we’ve been operating at over the past year or so, and what NAB has shown is incredible responsiveness under pressure,” she says.
“We gave them a short time frame to transition us to a single custodian between ourselves and Energy Super, and they demonstrated that they could do that with efficiency. Their focus was on getting it right, so we didn’t have any disruption to our members.
“I’m really looking forward to working with them to get better and better outcomes because we have a lot of integration and optimisation work to do as we bring these three organisations together.”
As Kate looks to the future for LGIAsuper, it’s clear that she’s hardly finished making her mark. She is relentless in ensuring the organisation’s small and personal boutique offering remains, while simultaneously putting strategies in place for strong and sustainable growth.
“It’s the concept of boutique at scale. That’s what we seek to achieve,” Kate says. “This will allow us to efficiently serve a greater number of members, but do it in a way that remains intimate, personalised and relevant, ensuring that people feel really supported and valued. At the end of the day, we do what we do all in the name of delivering great retirement outcomes for our members.”
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