Superannuation funds are concerned about product compliance around new demands on pre and post-tax reporting of performance, says the chief executive of DST Global Solutions, which provides software for asset managers.
“We anticipate a lot of changes around tax reporting,” says Tom Abraham. “There will be a whole industry around tax minimisation that will come out.”
About 75 per cent of $1.3 trillion in superannuation funds are DST clients, according to Abraham. DST has about 200 employees in Australia and operates in 45 countries through 13 offices that service about $5 trillion in assets.
London-based Abraham says another trend he is noticing among superannuation funds is that they are using more sophisticated securities in their portfolios such as over-the-counter derivatives.
“Fund structures have become more complex,” he says. “Investment managers are using overseas advisers and third parties.”
Abraham believes average costs per superannuation member may be higher than in other sophisticated markets in Europe and the US.
“Australia is a very bright spot as it is one of the few countries that has done anything about confronting an aging population and the amount of assets that must be set aside to fund retirement,” he says.