From CEO’s Union to Industry Pillar

The role of what used to be known as the fund secretary has grown enormously in the past 10 years.

Helping that growth, through the professional development of the chief and other fund executives, has been the Fund Executives Association Ltd, which marks its 10th anniversary year this month with its annual national conference and members’ dinner in Melbourne.

GREG BRIGHT, a former FEAL interim board member prior to its formalisation in 1999, traces the association’s history and looks at its likely future.

Associations, by their nature, tend to be a little amorphous. They are a bit like a political party. They aim to bring together like-minded people under an umbrella of common interests. Oftentimes, however, they’ll end up with more factions than a Labor caucus. Oftentimes, too, they will go to war with other associations within their industry, either over a specific issue or in prolonged battles for membership turf. But as imperfect as the reality may be, associations are nonetheless an integral part of any industry, in some ways even defining that industry or section of it, in the eyes of the wider world.

The one body which stands out in the superannuation industry, which from the outset sought to avoid such conflicts, is the Fund Executives Association Ltd (FEAL), which this year celebrates its 10th anniversary. Perhaps because it was the last of the three major organisations representing super fund interests to be formed, FEAL has tried hard to differentiate itself from the Association of Superannuation Funds of Australia (ASFA) and the Australian Institute of Superannuation Trustees (AIST).

In the process FEAL has evolved from a luncheon club for senior fund executives to a professional development body offering access to the most thorough of hands-on and academic training available for super fund management. Michael Dwyer, FEAL’s inaugural chair who now runs the $15 billion First State Super, says that the people involved at the start were clear that FEAL should not be another lobby group “Mavis (Robertson, who then ran CMSF and sat on the AIST board – the two organisations having subsequently merged) and Susan Ryan (then chief executive of AIST) challenged the wisdom of splintering the industry’s advocacy voice,” he says.

“We went to some lengths to assure them that we were not replacing any existing services.” Dwyer says that no one at the time was looking after the professional development of the people who were actually running the funds. “We had nearly a year of informal meetings before we formalised the association. We got enough input in that time to see there was a need that wasn’t being catered for.”

There were some differences of opinion, though, about who should be eligible to join FEAL. Michael Lillicrap, the influential interim board member who then ran REST, leaned towards exclusivity – a group for CEOs only was his preference. Vanessa Stoykov and her boss Ouma Sananikone, who were providing sponsorship support where required, leaned towards a broader church of all fund staff, including staff of commercial masterfunds. Inevitably, a compromise was reached.

Subsequent changes have favoured a broader membership base but there is still an exclusive element to FEAL. The annual Fund Executive Forum, for instance, is open to CEOs and direct reports only (the first one was only for CEOs). Most FEAL events have just one sponsor, which is the only service provider permitted to attend. The national conference, this year being held in Melbourne on August 13, is the only FEAL event open to everyone in the industry.

Dwyer believes that FEAL will continue to evolve and probably become more inclusive in future. “But we have to be careful to continue to harness the loyalty and the passion of the members we have,” he says. FEAL conducted a member survey last October, which showed that 80-90 per cent of respondents believed the association added value for its members. Howard Rosario, the current chair, who is CEO of Westscheme, says the other industry bodies have a much wider brief, including influencing policy, and do their jobs very well. “We try to identify the things which FEAL can do which others don’t,” he says. “Our training program is focused on delivering competencies for executives.”

The formal programs, of which there are now several including a Graduate Diploma (Organisational Leadership) with the prestigious Melbourne Business School of Melbourne University, involve partnerships with both learning bodies and sponsors. The program is an industry first in offering a customised post-graduate qualification with a pathway to an MBA from Melbourne Business School. Michael Baldwin, FEAL’s chief executive since 2001, sees his primary role as building lasting partnerships for the organisation.

“FEAL is here to support the leaders in the super industry. We do this so successfully because of the great partnerships we’ve forged with individuals and organisations that genuinely want to contribute to the professional development of fund executives.” Apart from Melbourne Business School, such partnerships involve the Centre for Investor Education (CIE), Investment Management Consultants Association (IMCA) and Wharton Business School, with long-term sponsors attached to lighten the financial load.

These sponsors are Aberdeen Asset Management, which continued active support for FEAL after buying EquitiLink in 2000, AMP Capital, which finances the Fund Executive of the Year Award, Tyndall, which provides a scholarship to the IMCAaffiliated CIMA course, and KPMG, which provides a new Wharton scholarship. KPMG has been with FEAL since inception, providing pro bono auditing, tax advice and services as well as sponsorships and the Wharton scholarship.

Aberdeen provides the FEAL Investment Education Scholarship for two fund executives to attend international CIE conferences. Aberdeen is also a regular event sponsor and CIE provides scholarship opportunities for its domestic conferences. The Fund Executive of the Year Award, launched in 2002 and with the recipients able to choose their international course, has gone to: Rosemary Vilgan (Q Super), Steve Gibbs (ARIA), Neil Cochrane (REST), David Elia (Host- Plus), Paul Watson (MTAA),

Ann Byrne (UniSuper) and Anne-Marie Corboy (HESTA). FEAL’s interest in Wharton was sparked by Vilgan who, as the first winner of the Fund Executive of the Year Award, went to Wharton to study behavioural finance. The 2009 Fund Executive of the Year will be announced at the members’ dinner on August 12.

To read the rest of this article, please subscribe to Investment & Technology magazine.

button_bg.png