A Brighter Future: Kate Farrar
Kate Farrar, CEO of superannuation fund Brighter Super, has led over 250,000 members through recent mergers. She reveals the secrets of the fund’s impressive growth and reveals its strategic aspirations.
With a rebrand and two mergers in two years, Brighter Super CEO Kate Farrar has had her hands full.
As CEO, she led former entity LGIAsuper through a merger with Energy Super in 2021 and assumed leadership of the merged fund. Then in 2022, overseen by Farrar, the entity acquired Suncorp’s superannuation business to form a US$19.6 billion super fund with more than a quarter of a million members.
Recently rebranded to Brighter Super, the wholly member-owned fund is now the second-fastest-growing in Australia, as per KPMG’s ‘Super Insights 2023‘ report, with a 56 percent fund growth.
In collaboration with
Tech Mahindra
"The big focus now is entirely around the membership. While we were worried about the impact of the changes on our team, the people who felt it the most were our members," Farrar says.
"What we are now doing, having completed this work, is to really focus on delivering the most excellent member experience and offering possible."
Forward Progress
When The CEO Magazine last spoke with Farrar in 2021, Brighter Super’s main goals were to scale up, reduce the cost per member and have more offerings. Many members now not only enjoy lower fees, but also have more choice.
"We have offerings now that we did not have before we started on that journey. For example, a very large number of our members were advised by external independent financial advisors," she explains.
"By integrating Suncorp’s superannuation business into Brighter Super, we can now manage and support those important partners of both ourselves and members."
"If we could meet face-to-face with every one of our members, we would."
Farrar insists what sets Brighter Super apart is how it lives its ‘boutique at scale’ offering. "What we mean by boutique at scale is providing extensive face-to-face, advice-led services at a scale that is very unusual for any organization and indeed for any other superannuation fund," she reveals.
"It’s the member intimacy – the way we understand our members and the fact that we connect with them. If we could meet face-to-face with every one of our members, we would."
Best of Both
Brighter Super’s mergers helped the fund take full advantage of market conditions. It ended up having three of its investment options – MySuper, Growth and Balanced – achieving double-digit returns in the financial year end 30 June 2023 (past performance is not a reliable indicator of future performance).
The fund’s MySuper option returned 10.62 percent in the 12 months to the end of June, giving it the highest return for a Queensland industry fund and the fifth-highest return nationally, according to the SuperRatings ‘Fund Crediting Rate’ survey MySuper Index rankings for the 12 months to 30 June 2023.
Farrar states the business used the growth and integration of portfolios in both cases to set the portfolio for what is "right for right now" and to consider how its future offerings will shape up.
"The team did a tremendous job of taking the best of both portfolios in the initial merger."
"The team did a tremendous job of taking the best of both portfolios in the initial merger and creating a fund that would perform in volatile markets, which we have seen," she says.
"It’s incredibly opportune for both membership bases because it delivers liquidity from Suncorp’s superannuation business. This has brought liquid-listed assets into a broader fund that has a high level of illiquidity, and the timing couldn’t be better.
"This will provide us with the opportunity to acquire more and even better illiquid assets at a time when valuations, frankly, have been coming off."
On Partnerships
Farrar stresses the importance partnerships have to Brighter Super’s success. She names several large and deep outsourced relationships, including the recent consolidation of its administration platform into its central partnership with Tech Mahindra.
"That enabled us to realize saving immediately. We have funded our transitions through reserves and they were built up specifically to fund strategic initiatives that would be of benefit into the future," she confirms.
"While there was immediate cost in the last financial year and the previous financial year, our operating costs have come down very quickly with the consolidation of the company."
"Our growth was never about changing our service offering to members. It was about ensuring we could continue to deliver this wonderful boutique service."
With her eye on the prize, Farrar says Brighter Super may require one more merger in the future to reach its objective of US$28.4 billion in scale, which she sees as the optimal size to deliver consistent results while still maintaining its boutique member experience.
"The team has done such a wonderful job of delivering a great cost base relative to our revenues, and a great cost per member, that we don’t need to rush into it," she says.
"Our growth was never about changing our service offering to members. It was about ensuring we could continue to deliver this wonderful boutique service proposition to members sustainably into the future."
In collaboration with
Tech Mahindra
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