Vamos uses a number of analogies to describe this: “The super industry has different pipes, different taps, different plumbing. We can’t consider [ourselves] as a whole industry. You can’t go around Australia on the one railway because we have different rail gauges in the states. In super, there are different forms, different ID requirements to change funds. If we made it easy for people to deal with us, the industry would be better off.” SuperStream can improve this. So can MySuper, she says. Each fund’s version of the new default vehicle will be different, but the common name can provide some basis for comparison. To date, this kind of comparison across the market has been too difficult, and arguably oversimplified by the prudential regulator’s reporting of investment returns at the whole-offund level. “I’m not saying all funds are the same, but consumers have hit the wall. They’re asking: ‘Where do I start?’ MySuper is about being the first step to be able to compare, but funds are not transparent.” If the industry was able to cooperate without the force of imminent regulation, some quick wins can be claimed, she says. The proposal to implement swimEC (superannuation, wealth and investment management electronic commerce) data standards is a case in point.
After joining ASFA in August 2007, Vamos soon became chair of the swimEC committee. “There’s no competitive advantage in complying with swimEC, and so mandatory legislative backing is essential” to get it over the line. “Just get it up and running,” she says, and override the vested interests in the way. In the second half of 2010, a six-month study on swimEC was undertaken with Jeremy Cooper to see how an industry body could be created to implement the standard, and has been sent to industry associations. “I’ve asked that the recommendations be supported, and the industry go to [the] Government,” Vamos says, but adds ruefully that there’s push-back on it, along the lines of ‘but if we support this, then it looks as if we are supporting ASFA’. “There are different views on what type of body it should be,” she acknowledges, but then repeats: “Just get it up and running”. “We all want to win, but we have to start compromising on some issues.” Another sitting duck is risk management. Last year, the Australian Prudential and Regulatory Authority (APRA) issued a letter about investment timing in super fund portfolios.
A joint working group involving ASFA, the FSC, APRA and the market regulator was formed to determine guidelines on the matter, and the progress has been encouraging. “Everybody is in the tent,” Vamos says. “Will it be perfect? No, but we’re nearly there – we’ll draw a line in the sand. It’s 90 per cent there.” But if the talks stall, APRA itself will move on and enforce new standards without serious input from the FSC and AFSA. “I’ve had 10 years in this game, and I’ve seen this so many times. Because there hasn’t been an ability to compromise, the Government says ‘we will draw the line’. [They] draw the line, not in the middle, but anywhere, and that’s where you get unintended consequences.” It will be a long-term win for the industry if the big reform pieces of 2011 were implemented well. “If reform goes through in the way it should, then it will transform the industry,” she says. But it would be a pity if the Stronger Super reforms suffered a fate similar to the superannuation clearing house legislation of a few years ago. Here, the aim was to decide on the structure for a clearing house to process super payments made by small- and medium-sized businesses.
