Many in the financial services industry blame the press for the slightly tired narrative of the so-called “super wars”. And given the obsession of the two national broadsheet newspapers with the rise of industry super funds and the sector’s foundational myths, the charge is not entirely without merit.
But it is really Canberra, and not the fourth estate, that continues to see the $3.5 trillion pool of retirement savings as a source of seemingly endless point-scoring and entertainment. And the circus is about to roll into town once again.
On Tuesday night, the federal Parliament referred a new inquiry on “improving consumer experiences, choice and outcomes in Australia’s retirement system” to the Senate Economic References Committee. The inquiry came with very broad terms of reference, ranging from “regulatory and tax impediments” to uptake of retirement and insurance products to “the potential role of fintech platforms, technologies, and innovations in supporting better retirement outcomes”.
The motion was moved and then welcomed in a press release by NSW Senator Andrew Bragg, who was a staffer at the Financial Services Council in a previous life and is a high-profile critic of the compulsory super system. It is understood the inquiry is not just a pet project from Bragg but enjoys the support of the Coalition economic frontbench.
An intervention from Teal independent and former Wallaby David Pocock saw “the impact of climate change” on insurance premiums and value of assets added in.
But financial services policy insiders, most of whom canvassed by Investment Magazine did not expect the new inquiry, were under few illusions that the probe will probably spend much of its time on the highly topical regulatory crackdown on perceived low standards of member engagement and customer service, especially on retirement preparedness (alongside some colourful forays to topics like super for housing, naturally).
Given its size and importance, it is entirely appropriate that the super system be given thorough oversight by the Federal Parliament. But it is hard to imagine what fresh evidence this particular probe may yield that decades of successive hearings, reports and debates have not already turned up.
It seems, on face value, to be mostly motivated by party politics, with the Coalition keen to keep misconduct by super funds in the frame, especially any pertaining to profit-for-member funds tied by history and personnel to the union movement.
Many in the industry will roll their eyes as a result, as executives and their advisers begrudgingly await their summonses to appear before the inquiry. Some have privately made the case that the focus from the government and regulators on member experience is overblown – an ideologically motivated pile-on.
But if that is the growing (albeit quiet) consensus in the industry, then they should instead view this inquiry as an opportunity to clear their name and counter the narrative, especially for their industry bodies, who have so far been tellingly silent in defending their members against the slew of recent charges.
Arguably, they have been distracted. The new Super Members Council of Australia has only just been established, rising from the ashes of AIST and ISA, while the broader Association of Superannuation Funds of Australia has been busily preparing for this week’s annual conference amid a round of redundancies and some considerable financial challenges.
By the new year, both will have fresh leadership, with the announcements of former political journalist and Universities Australia boss Misha Schubert as SMCA CEO and former HESTA senior manager Mary Delahunty as ASFA CEO.
Should they be invited to appear before public hearings, both new leaders will have the opportunity to provide some leadership to their powerful members, who have all of a sudden found themselves rather friendless in high places (at least in public).
More broadly, the inquiry could be an opportunity for a genuine battle of ideas ahead of the next federal election, with Labor clinging to an objective of super focused on preservation, and the Coalition arguing in favour of a tiered approach that downplays super’s importance as only equal to home ownership (at best).
Or, if that is a little too lofty, the industry should at least try to sit back and enjoy the show.
