Aware Super's interest in merging with TelstraSuper stems from its ongoing quest for expansion. As the smallest of Australia's "megafunds," it aims to compete more robustly with corporate super services and views TelstraSuper’s expertise as a valuable asset. Despite differing retirement strategies, the partnership could present substantial financial benefits, given TelstraSuper’s $26 billion in assets—a significant increase for Aware.
Industry insiders suggest that the allure of TelstraSuper lies in its sizable asset pool, offering Aware a strategic advantage and an opportunity to outpace competitors such as Australian Retirement Trust (ART). Despite ART's recent successful mergers, Aware hopes to leverage this collaboration to enhance member services and technological capabilities.
This merger also comes amid mounting regulatory and public pressure for funds to prioritise member services over merely accumulating funds under management (FUM). While Aware seeks to expand, it must also consider whether the merger would diversify its largely retirement-based member demographic.
For TelstraSuper, merging with Aware provides a viable exit strategy in a challenging environment for smaller super funds. Its members stand to benefit from improved digital offerings and the increased scale of Aware. Despite significant preparation for its previous merger attempt, additional transitions such as custody arrangements with Northern Trust could incur further costs for members.
The prospective merger presents both opportunities and risks. Merging operations requires careful alignment to realise mutual benefits without disrupting business as usual. Staff uncertainty and potential job losses must also be cautiously managed to ensure seamless integration.
Should the merger succeed, both funds would benefit from a stronger market position and enhanced member offerings. However, another failure would be considerably damaging, given TelstraSuper's previous near miss with Equip Super. As due diligence progresses, stakeholders eagerly await definitive outcomes from ongoing discussions.
