New Association of Superannuation Funds of Australia boss Martin Fahy wants the peak body’s retail and non-profit stakeholders to keep a lid on their infighting, and focus on presenting a more united front – to government and the public – on their common interests.
Advocating for a legislative definition of the purpose of the superannuation system that makes reference to an aspirational target that people should be able to self-fund a “dignified” or “adequate” standard of living in retirement is one obvious area of common ground.
As is lobbying for the compulsory employer contribution rate, known as the super guarantee, to be raised to at least 12 per cent as soon as practical.
Both of these measures would support the flow of funds into the $2.1 trillion sector.
But unity on these issues has been overshadowed by factional wars in response to the government’s plans to expose the default fund selection process to market-based competition and force all funds to have boards comprised of at least one third independent directors, both moves the retail fund lobby supports and the industry fund lobby rejects.
Fahy was named as the successor to longstanding Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos in September, and commenced in the role last week.
Many of ASFA’s members are also members of one of the non-profit fund lobby groups – Industry Super Australia and the Australian Institute of Superannuation Trustees – or the Financial Services Council, which represents the interests of bank-owned and retail wealth managers.
Speaking to Investment Magazine on the sidelines of ASFA’s annual conference on the Gold Coast on Thursday, Fahy said he was hopeful the industry was moving towards a more collaborative approach.
“There will always be some issues on which our members disagree, but I truly believe ASFA can be a united voice for the industry,” he said
“I am literally eight days into the job and I might be delusional but two things have happened in the past week that show how the industry can present a united front,” Fahy said.
He was referring to two notable collaborations between the various super peak bodies: the establishment of the insurance in superannuation industry working group, and a successful push to get the Australian Securities and Investments Commission (ASIC) to push back the February 1, 2017 deadline for the implementation of new product and fee disclosure guidelines.
ASIC commissioner Greg Tanzer indicated during a session at the conference on Thursday afternoon that this reprieve was soon to be formally announced.
ASFA chair Michael Easson opened the conference on Wednesday with a warning to the industry that “disunity is death”.
Easson told delegates they needed to “act with more unity and cohesion”, and show respect for each other’s points of view or risk being perceived as “headless chooks”.
“In the big barnyard of superannuation we sometimes need to peck out the intruders, the elements that give us all a bad name. But let’s not get into a frenzy of excitement, madly drawing blood and attacking each other,” he said.
“It is debilitating to confidence and damaging for the community. Divided we fall.”
Easson also used his speech to drive home the need for the industry to build trust and engagement with the members whose money it manages.
Speaking to Investment Magazine, Fahy echoed these sentiments.
“We’ve got an environment characterised by political expediency and real short-term fiscal imperatives as well as the perceived presence of rent seekers”.
He said the mix of low bond yields, political uncertainty, and turbulent market conditions made this even more important.
Workers handing over 9.5 per cent of their salary to the superannuation industry need to feel a strong sense of trust.
“We can’t control the vagaries of the market but we must do everything we can to be efficient, fair, transparent, and deliver value,” Fahy said.
“We can’t just license our way to trust, we have to earn it.”