The Supervision Industry (Supervision) Act 1993 effectively compels superannuation fund trustees into a tripartite relationship with asset consultants and fund managers. Analysis of the superannuation industry using Porter's five forces approach suggests that conflict is likely to occur between asset consultants and fund managers. Such conflict may produce sub-optimal outcomes for trustees and ultimately, for the beneficiaries of the fund. This paper examines the causes and dimensions of the conflict, with a view to recommending ways in which trustees can minimise it.
The existence of the conflict is confirmed in secondary literature and in an experience survey of selected participants. The experience survey identifies fourteen areas of conflict related to the broad issues of investment performance, communication, and the quality of asset consultants. Methodological obstacles - particularly the emergent nature of the problem and the indeterminacy of the underlying problem - prevented the collection of quantitative data.
A relationship marketing approach was employed to analyse the tripartite relationship between trustees, asset consultants and fund managers. The concepts of relationship marketing were considered to be more appropriate to the unusual characteristics of the superannuation industry than any alternative conceptual framework. In particular, the 'Five Building Blocks of Customer Partnerships' model, the 'Expanded Marketing Mix Model' and the 'Six Markets Model' were drawn on to derive recommendations for the effective management of the tripartite relationship.