Pauline Vamos has been a formidable force in the superannuation industry as head of ASFA, demonstrated by her 2013 win of the Australian Financial Review and Westpac’s 100 Women of Influence – Board/Management award.
Vamos’ success stems from the pursuit of her personal “noble cause”, which she defines as ensuring systems do not destroy peoples’ dreams.
“We [ASFA] are about sustainable equity of the system. We are about raising the standards of the industry, raising the behaviour; we are about making sure the collective community is looked after. Funds look after their members – not a drama – but there is the collective membership, the collective community and you cannot look after one and not the other, and that’s ASFA’s job,” Vamos says.
ASFA puts on close to 60 events; offers continuing professional development (CPD) courses and superannuation education for people at all stages of their career; undertakes technical research as well as engaging with the both the government and the regulator on policy issues.
“If only ASFA members understood what this team does at all levels,” Vamos says. “The team are very mindful of who pays their salary. They are very mindful of what they need to do. There are amazing people across the whole industry, but when I look at the dedication and the outworkings of this team, it’s the hardest reason to leave.”
One of the outworkings Vamos is most proud of is Super Guru, a consumer website designed to help members of the public understand and maximise their superannuation. It has improved the communication between the industry and super fund members, thereby helping people to reach their dreams. To achieve this Vamos had to bring together multiple ASFA teams including developers, editorial and policy.
“There is no island in ASFA; it’s all integrated, even if sometimes it creaks and sometimes something drops,” Vamos says. ”Eight or nine years ago in January and February you could take time off, but it is relentless now.”
Superfunds lacking Indigenous and ethnicity data
Despite the relentlessness in some quarters of the industry, the lack of movement to resolve issues faced by Indigenous peoples in superannuation exasperates Vamos.
Currently, the biggest issues are that the majority cannot easily access benefits and a lack of data at super funds on members’ ethnicity is curtailing efforts to target programs.
Research by National Australia Bank shows 43.1 per cent of Indigenous Australians are fully or severely financially excluded, compared with 17.2 per cent of the rest of the population.
ASFA’s own research underlines this financial exclusion, revealing superannuation coverage for Indigenous Australians is about 66 per cent for men and 55 per cent for women; compared to rates of 85 per cent for men and 80 per cent for women for the general population.
The First Nation Foundation (a charity that is working to bridge the gap between financial services and Indigenous peoples through events like the Big Koori Super Day Out) chief executive, Amanda Young, says the lack of ethnicity data at super funds means they are unable to target and meet the unique needs of Indigenous peoples, such as a lack of formal identification.
“This is particularly true of death benefits because a lot of the paperwork we take for granted Indigenous peoples don’t have, particularly in remote communities. And the way children move between households is not the usual [non- Indigenous] way,” Vamos says.
“But there are structures within Centrelink and the community that clearly identify who is looking after children and who is best to [do that], so give them the money. We so often spend so much time talking and not enough time doing. We’ve got stop the talk, and do the do, and then review.
“I’m a doer, and a thinker, but I know you have to collaborate and gain consensus, I have learnt that in the last nine years – just because you’re the boss you never get your way – but sometimes you’ve just got to make a decision and move forward. The answer is there, but people are scared to go ahead in case they make a mistake.
“In my view if you make a mistake you fix it. Take it on the chin and fix it. Better to make mistake and fix it than not make a decision.”
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Communicate, communicate, communicate
For Vamos, success hinges on communication, which explains why she has doubled the size of the marketing and communications team during her tenure as, “everything goes through them”.
“You can have the best thing in the world, the best services, the best product, but if people can’t access it and it’s hard to deal with the system they will go elsewhere, and they do,” says Vamos.
And just like stakeholders in super funds and service providers, ASFA’s clients’ and members’ expectations have risen and keep on rising.
“Our members are highly demanding and if we don’t keep on communicating, communicating, communicating, we suddenly become irrelevant.”
Vamos’ focus on communication extends into the wider industry. Looking back her biggest regret is the narrow definition for superannuation’s objective – a result, she believes, of there being too many voices clamouring for attention.
“We approached all the other bodies saying, ‘This is what we think. Do you want to work together?’ But there was so much distrust and self-interest that the industry did not come together.
“So what happens? I’m sitting at the roundtable, the minister is there, and guess what, there’s 20 people around the room and everybody has a different view. If the three or four industry bodies had all come up with the same definition we would have a much broader definition of the purpose of the system. So that is an opportunity lost.”
The issue of too many associations weakening the voice of the sector is a problem that also afflicts the financial planning industry.
Last September, Professional Planner – the sister publication to Investment Magazine – reported that at least 10 national bodies represent financial planners, and as a result “they often struggled to be heard above the white noise of background chatter”.
However, in a demonstration of what can be achieved, the chief executive of the Association of Financial Planner (AFA), Brad Fox, said close co-operation between the two associations that solely represent financial planning practitioners had produced superior outcomes.
“The recent evidence is that there is a greater willingness for associations to get together and compromise in presenting a joint voice to government,” he told Professional Planner.
“There were many efforts to do this during FoFA [Future of Financial Advice]. And if we take the most recent example, the Life Insurance Framework, the AFA worked with the FPA [Financial Planners Association] to reach a position that was identical. It’s a much more productive way of using everybody’s’ time,” Fox said.
This cooperation is not often seen in superannuation, with fee disclosure being another example of an opportunity lost, Vamos says.
“Again, there was consultation with the industry, but again you could see the exasperation in the eyes of the regulator and they are actually saying: “Can you all come together with the one view, please?” But we wouldn’t – we wouldn’t.
“We all have our views and then we leave it to the regulator or the government to arbitrate and come up with a view and then we are surprised when it’s not our view. So you water down the voice and reduce the ability to advocate. That has got to stop otherwise we will get nowhere.
Even inside associations, achieving consensus can be difficult, and ASFA is no exception.
The ASFA board is made up of an equal number of representatives from service providers, corporate funds, public sector funds, industry funds and retail funds overseen by an independent chair (see box).
While the structure of ASFA’s board ensures the diversity of the sector is represented, it presents other challenges.
David Gonski – Australia’s most eminent chair – takes the view that for representatives it is very hard to keep independence of mind, and that independence, for him, is a crucial component of an ideal board.
“It’s not easy for the members of the board to put aside their history and work together. It’s not,” Vamos says.
“If these conversations were easy board meetings wouldn’t take quite so long. But it’s not easy and you have to thrash out the issues as the day of easy policy has gone, long gone.
“Policy is complex. Assessing impact and outcomes is incredibly complex. There is no easy policy. It takes time and it is taking more time. That is why on some things you have to come together because it takes time, it takes research, and it takes resources.”
An association of associations
It is this idea about the pooling of resources, in part to avoid wasteful duplication, which leads Vamos to suggest the way to break the impasse between associations is to form a new overarching association.
“That association would be almost like the Council of Financial Regulators, to use a very bizarre but relevant example for this industry. This new association would have a very narrow purpose, where the chairs and CEOs of the industry bodies come together and agree what is best left to the peak body for the super industry – ASFA – and what should the others be doing.
“Yes, there are differences of view and they may be on sector lines or structural lines because of the type of structure an entity may have. But the industry needs to advocate as one in the best interest of members and the community and the system otherwise it will lose the day.
“And we always have to remember it’s not our system. We don’t get paid for it. We get paid. We are completely conflicted.
“Taxpayers pay for it, and we forget that sometimes.”