When Insignia Financial chief executive Scott Hartley joined the company earlier this year, he faced a massive task to reinvigorate the listed financial services business and convince key stakeholders it has a vibrant future.
Part of Hartley’s plan to tackle the issues Insignia faces came into clearer focus this week with a raft of new appointments and a restructuring of the executive team to reorganise the business into four lines: asset management, superannuation (master trusts), wrap platform, and advice.
There are still a couple of missing details – the identity of the newly created superannuation CEO to oversee the master trust business, for example – but the team unveiled by Hartley this week is the team he intends will take the business forward. And while he insists “it’s not my shtick” to raid the talent ranks of his former employer, the name AMP does crop up a bit on appointees’ CVs.
Australia needs a vibrant and efficient retail superannuation sector to provide a viable alternative to not-for-profit funds. For one thing, it is increasingly clear that the best retirement income outcomes for individuals are achieved with a mix of product and advice (or guidance or information, call it what you will), and not-for-profit funds as a cohort continue to drag the chain on developing effective retirement income strategies.
Developing retirement income strategies is a financial adviser’s bread and butter, and advisers have a long track record of supporting retail funds and being well-supported in return with efficient administration and reporting underpinned by massive technology spends.
But it does consumers potentially great harm – not to mention playing into unhelpful stereotypes – if the retail funds used by advisers are higher-cost and lower-return than not-for-profit funds.
Hartley says the Insignia reorganisation will drive efficiency and growth and will enhance the group’s ability to develop AI-enabled and technology-supported products and services. And he says the new appointments broaden and complement the experience of its existing executive team.
But even with Hartley’s reorganisation, conducted with an eye on simplification, Insignia remains a complex beast.
Any business that has a track record of acquisitions as lively as Insignia’s, many completed under the former IOOF banner, is going to have complexity in structure and reporting lines, multiple brands in market – whether deliberately or not – and a degree of confusion around how it faces its chosen markets.
Under Hartley’s reorganisation, for example, functions such as product and distribution, previously handled at a group level, will devolve to the four separate business lines, allowing each business to focus clearly on its target market.
But Insignia faces stiff competition in each of those businesses, often from organisations that enjoy the luxury of specialisation.
“We’re running four quite different businesses that…have very different markets, that have different customers, and very different competitors,” Hartley says.
“At the moment, I think it’s hard for our executive team to really focus on those market segments because we’re looking at the market in a very broad way. If you want to compete and win you need to be focused.”
“For example, in wrap, very focused on beating HUB24 and Netwealth and AMP and whoever; in the master trust or the super fund part of the business, we need to compete with ART, with AussieSuper, Aware, those sorts of funds – very different spaces of competition, very different clients.”
The part of Insignia’s business most obviously adviser-supported is wrap platforms, which Hartley describes as “all about advisers”.
“Yes, you do look after the end clients, but the advisers make a call,” Hartley says.
“And the master trust, or superannuation [business], it’s very much these days a consumer-direct acquisition model.”
Whether Hartley and his newly assembled executive team can execute the strategy to make Insignia a strong retail competitor to the not-for-profit sector remains to be seen, but as of this week the business is at least taking its first steps.
