Sunsuper chief executive Scott Hartley has welcomed the scrutiny of a royal commission encompassing the superannuation industry.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which kicked off in February, coincides with a series of other critical examinations of superannuation.
The scrutiny includes a major review of super default arrangements by the Productivity Commission, mounting pressure on funds from the Australian Prudential Regulation Authority (APRA), increased regulatory focus on life insurance provisions within super, and a new Treasury review of retirement income products.
Many in the industry have lamented the resulting raft of possible regulatory changes as disruptive and detrimental, but Sunsuper’s Hartley does not see it that way.
“I expect that the royal commission and other regulator inquires will lead to constructive changes that will strengthen consumer trust in the industry,” he says.
The real challenge is tech
He believes “remaining competitive and economically viable” in the face of rapidly evolving member expectations is the biggest challenge facing the superannuation industry this year.
A particular challenge, he notes, it that advancements in general consumer technologies have led to average Australians expecting a lot more from their super fund.
“In the age of Airbnb, Uber and other trust-based, digitised business models, customers…expect a much more efficient and engaging customer experience,” Hartley says.
Hence why he says “customer advocacy” is vital for Sunsuper’s long-term growth and success, as member satisfaction helps promote the fund, which leads to more members and funds under management.
In 2014, the Brisbane-based fund announced that it was planning on spending $100 million over three years to update its technology. Hartley says the technological transformation the fund has undergone so far, notably the implementation of a new digital platform, has improved service to members.
The long horizon for growth
The chief executive describes the fund’s long-term growth strategy as multi-channel and multi-segment.
“Our long-term growth strategy is designed to generate strong organic growth while considering appropriate mergers in order to gain step changes in scale, and each plank in this strategy plays an important part,” Hartley says.
He adds that ensuring the successful completion of the fund’s merger with Melbourne-based Kinetic Super by May of this year remains his top priority.
The merger will add a further $3 billion to Sunsuper’s $49 billion in funds under management and about 300,000 new members to its existing 1 million, cementing its position as one of the largest funds in Australia.
Sunsuper is a finalist for in eight categories for the 2018 Conexus Financial Superannuation Awards: Best Insurance Offering, Default Fund of the Year, Pension Fund of the Year, Member Services Fund of the Year, Best Advice Offering, Innovation and Transformation, CIO of the Year; and Large Fund of the Year (for funds with $10 billion or more in FUM).
About the awards
The Conexus Financial Superannuation Awards recognise excellence in the industry and aim to encourage super funds to raise the bar in all aspects of their operations. The focus of the awards is to honour funds that offer products and services that will ultimately lead to better retirement outcome for members.
While there are many other awards nights on the industry calendar, the Conexus Financial Superannuation Awards are unique in that they are not aligned to a research or ratings house, and do not charge funds to participate. Actuarial and consulting firm Rice Warner assist with quantitative analysis.
The judging panel comprises California State Teachers’ Retirement System chief investment officer Chris Ailman, Fund Executives Association Ltd (FEAL) chief executive Joanna Davison, CHOICE chief executive Alan Kirkland, Financial Services Council chief executive Sally Loane, Rice Warner chief executive Michael Rice, and former minister for financial services and superannuation, the Hon. Bernie Ripoll.
“There’s no shortage of commentary or opinions on super fund performance but the strength of this process is the focus on data, which removes a lot of the subjectivity,” CHOICE’s Kirkland says. “At the same time, the growing debate about the importance of effective governance has forced us to bring in some qualitative assessment of factors like this, which can’t be reduced to numbers.”
APRA deputy chair Helen Rowell is a special adviser to the judging committee, which remains the only truly independent awards panel in the sector.
“APRA views sound governance practices as fundamental to the delivery of value for money outcomes for members,” Rowell says. “I was, therefore, very pleased to see the steps taken by the judging panel this year to enhance the approach to assessing governance practices and give it more weight in determining the winners in various categories.”
Rowell says APRA encourages all trustees to continue to improve their practices and the outcomes delivered for their members.
“Industry awards, such as the Conexus Awards, are one means for helping the industry to do this by identifying better practices in key areas,” she says.
The 2018 Conexus Financial Superannuation Awards are produced with thanks to platinum sponsor AIA Australia and event partner, FEAL. All the winners will be announced at a special black-tie event on March 8 at the Ivy Ballroom, Sydney. Tickets are now available.