Ian Silk’s call for the superannuation industry to raise its game and take on the “grand ambition” of giving all Australians an adequate income in retirement has been endorsed by a cross-section of leading figures.
The chief executive of AustralianSuper was speaking at the Association of Superannuation Funds of Australia (ASFA) annual conference in Brisbane, where prominent delegates have subsequently gone on record to endorse his message.
Silk, whose speech opened the conference, called on the industry to have a “man on the moon moment”, invoking John Kennedy’s vision for the space race as benefitting all of humanity and not just those directly involved.
In this context, he asked delegates what was their “grand ambition” for the industry.
He said: “Isn’t it enough for us to do what we are required to do by our boards, by the regulators, by the government? No, it’s not. Not even close.”
He suggested the industry’s goal should be to give every Australian an adequate income in retirement.
“If we fail to deliver, the consequences are dire. Australians will feel uncertain about their futures and confidence will wane,” he said. “What a failure that would be, given our industry was explicitly created to help alleviate worry for working Australians.”
He also took aim at the reward culture in financial services and superannuation. He said, such rewards should not be linked to profit, size or the number of members or customers it had.
“It’s simply about two things – our customers, our members, having the best shot we can give them at a comfortable life, and their absolute confidence in the industry.” He said: “If we pay bonuses, pay bonuses based only on those two measures.”
Silk’s message resonated with other superannuation chief executives at the conference.
Leeanne Turner, chief executive of MTAA Super, believes self-interest had to be taken out of every role performed in superannuation. “We have to do this as an industry or otherwise we will have people thinking about us like used car salesmen,” she said.
Michael Clancy, chief executive of Qantas Super, saw the grand ambition as putting a greater focus on the member. “Part of the reason superannuation has been as success as it has is because at various points in time it has chosen to reinvent itself and Ian’s speech was a challenge to reinvent again,” he said.
And director of consulting at Frontier Advisors, Fiona Trafford Walker, saw the speech as Silk’s recognition of not yet having done enough.
“If you can’t leave an industry better than when you’ve found it, then you haven’t really done your job. Ian is even laying that challenge down to himself, he’s not saying by any means he’s solved it,” she said.
She also saw the industry as needing to get its message straight on bonuses.
“Many of industries where we have members don’t pay a bonus, a nurse doesn’t have a bonus for saving an extra life, a teacher doesn’t get a bonus for every extra point a kid scores on a test, they just do their jobs,” she said. “That’s a flaw in the financial service industry and it’s very, very hard to change.”
Pauline Vamos, chief executive of ASFA, saw Silk’s message as a sign that funds should move away from benchmarking.
“At the moment we measure our success against what others are doing. That actually is not what we should be doing,” she said. “Each fund is different, each cohort is different. What we should be measuring is are we getting our own members to their retirement goals and are we able to provide them with the access to income they need when they retire.”