“We actually started an advertising campaign earlier this year, which is a multi-year campaign to build our brand, so that more everyday Australians actually know who Vanguard is,” Mr Lovett said.
Mr Lovett said he expects it to take a long-time for Vanguard to build its brand to the scale needed to compete with existing players.
Financial Services Council chief executive Sally Loane said the “cult of Vanguard is extraordinary”.
“I’ve got young adult children and the first thing they ever wanted to do was to invest in a Vanguard [exchange traded fund] and I had no idea where they even heard the name Vanguard,” she said.
Mercer Australia chief executive David Bryant said the superannuation business model was ripe for disruption as a result of changing preferences for responsible investment and ongoing consolidation in the industry.
The wave of merger activity meant there could soon be just three types of super funds including large funds, purpose-driven funds that cater to particular industries, and challenger brands that aim to disrupt the system, Mr Bryant said.
“I do say to a lot of people, what does Amazon super look like?,” he asked.
Sunsuper chief executive Bernard Reilly said ongoing merger activity in the super sector was beneficial because larger funds had lower operating costs and greater access to investment opportunities.
He said Sunsuper’s proposed merger with QSuper, which is still being negotiated, would create a combined fund with 2 million members and $200 billion in assets under management.
“The scale with the $200 billion fund allows you to participate in larger deals and larger opportunities than you otherwise would have been able to at a $50 billion fund or even a $100 billion fund,” added Mr Reilly.
Australian Prudential Regulation Authority deputy chairwoman Helen Rowell said the regulator was open to new powers forcing super funds to merge to fast track moves to push small super funds out of the system.
“But I think there’s also an expectation from government that we use the ones we’ve got to their fullest potential and that’s what we’re doing,” said Ms Rowell.
“I think we are using the powers that we have to their full potential and more aggressively than we have ever had in the past and we will keep pushing in that way.”