Superannuation funds need to ensure every part of their organisational structure is geared towards members’ interests to rebuild trust in the sector, First State Super chief executive Michael Dwyer said.
Speaking at the 2018 ASFA Conference in Adelaide, Dwyer told attendees that building trust would involve superannuation organisations actively becoming part of the communities they serve. It would also involve telling that story.
“We need to rebuild trust and I think we all have a role to play,” Dwyer said. “We need to act as if our members are in the room with us when we’re making decisions, especially when no one is watching.”
He said First State Super had helped build a hospital in Bendigo, invested in world-class training facilities for firefighters and developed airports and air ambulance facilities, along with helping a new generation of businesses compete on a global scale by partnering with venture-capital firms.
“We are making a difference in communities – where our members live, where they work and where they retire,” Dwyer said. “We do this by investing in ways that generate jobs, foster innovation and contribute to a more productive economy.
“We have boundless opportunities to demonstrate the value we create for our members but I think we need to do more to bring this to the attention of our members and, importantly, the government.”
He said funds could “show that they care” by working to remain relevant to members throughout their lives. Giving solid financial advice was a major part of this, he explained, and those benefits needed to be inclusive for all Australians. He said 3.3 million Australian adults had low levels of financial literacy and were severely or completely excluded from the financial services sector.
“We need to create short-term urgency in a long-term product,” Dwyer said. “We need to communicate in a language that is simple and accessible, and develop products and services that meet our members’ needs. As those needs evolve, we need to evolve.”
As the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry continues to play out, he said, organisations needed to lead the way towards the changes they wanted to see, rather than waiting for others in the industry or the government to step in with new regulations.
“We can’t expect government always to mandate change for us,” Dwyer said. “We must stop blaming complexity in the system. If we genuinely care, we need to engage, we need to influence, and we need to lead change in our industry.”
Culture within an organisation is important and superannuation organisations shouldn’t just hire the smartest people, they should also look for people with a strong moral compass who are able to align with the organisation’s purpose and values, he argued.
Australia has one of the strongest retirement savings systems in the world, he noted, pointing to ASFA figures showing that at the end of 2017, Australian super funds had achieved an average investment return of 10.4 per cent over the last five years. This was the highest average recorded in the Organisation for Economic Co-operation and Development over this period.
“We need to continually demonstrate to our members and key stakeholders, including government, that we are professional, that we are experienced, and that we are successfully delivering on the purpose of super to help Australians enjoy a dignified retirement,” Dwyer said. “How do we build trust? We put our members first. We must remember whom we are here to serve.”