A track record doesn’t speak for itself because it isn’t responsible for how the fund will perform in the future.” He says funds should carveoff part of their spend on external funds managers and use it to improve governance structures and build stronger internal capabilities. Within super funds, “boards and their corporate teams seem to operate in their own little boxes rather than trying to create something greater than the sum of its parts”. Trust between funds and consultants has become “strained”. “Relationships need to improve, but not to the point where they’re too cozy.”

This is because “cozy” relationships set the stage for a betrayal of trust. Madoff was considered ‘one of us’ by wealthy investors circulating throughout New York, Aspen and Palm Beach. He gained the confidence of investors because people “are cautious of taboos and trust people like us”. The consistent, upward investment gains also played their part: “some people were perturbed about how good the returns were. But greed won out”. Madoff has since been painted as a monster. This irks Jack Gray, who also presented at the FEAL Forum, “because he’s no longer one of us. It makes it too easy.” By vilifying Madoff, his victims are exonerated from their faulty judgment, Gray, adjunct professor of finance at University of Technology Sydney, says.