Insignia to outsource admin as SS&C moves in on Link’s turf

Insignia Financial plans to outsource administration services for its Master Trust business but is hoping to avoid the reputational damage suffered by industry funds by keeping claims in-house.

Insignia Financial CEO Scott Hartley. Picture: Arsineh Houspian

Insignia Financial plans to outsource administration services for its Master Trust business to SS&C Technologies but crucially will keep its complaints and claims handling in-house, as it looks to cut costs while avoiding the same fate as industry funds marred by reputational damage over woeful claims processing.

Insignia on Tuesday said it had entered into an initial agreement for global technology and fund administration provider SS&C to provide admin services to its members, with a final binding agreement expected during the first quarter of 2025.

Speaking to The Australian, Insignia chief executive Scott Hartley said the partnership inked with SS&C, a global technology and fund administration provider, would establish SS&C as a competitive player in the local industry at a time when outsourcing options for funds were “thin” on the ground.

“The outsourcing industry in Australia is quite thin and not very competitive. There’s few options for those funds that do choose to outsource,” Mr Hartley said.

“We are partnering with SS&C for two reasons. Firstly, to get to better customer service, better contemporary technology and lower cost to serve. But also, we’re establishing in this partnership, a competitive provider, which is sorely needed, to service the industry.”

Competing against the current players in the market, such as Link Market Services, was a big opportunity for SS&C, Mr Hartley added.

Admin provider Link has been at the heart of the scandals engulfing super funds in recent months, particularly around delays in processing death and disability claims.

Cbus put a spotlight on super fund administration when chief executive Kristian Fok last month told a parliamentary inquiry that a delay in death and disability payments — spanning in some cases more than 12 months — emanated from its administrator, Link.

Link was sold to Japan’s Mitsubishi UFG Financial Group last year for $1.2bn.

Admin peer Iress, meanwhile, has also been in the spotlight for shocking admin failures for ESSSuper members, including around payments, tax obligations, life insurance and risk and compliance.

As part of the deal between Insignia and SS&C, more than 1,000 of Insignia’s customer service, technology and admin staff will transition to SS&C.

“(SS&C) picks up over 1000 very capable and experienced people. They’re essentially acquiring capability that would take them literally years and years to build,” Mr Hartley said.

It would also mean continuity of service, operations and product knowledge for members, Mr Hartley said, adding that Insignia would still provide claims and complaints functions, as well as the “nudges” delivered to members.

The deal would provide much needed scale to the Master Trust business, he said.

“In our Master Trust we have size but not scale. This arrangement will help us convert our size into meaningful scale benefits for our more than one million members over the next few years.

“Following the successful separation from NAB last month, this is the next step in simplifying our Master Trust business and a critical step to achieve our targeted net $200m reduction in base opex by fiscal 2030.”