Since taking the reins of the once-mighty wealth manager AMP, chief executive Alexis George has overseen a rationalisation of the business and a rebuilding of staff morale, product quality and brand. But a 20 per cent increase in underlying profit in her final full-year result as CEO left the market cold.
Australia’s profit-to-member funds are trying to attract and retain members through ever-increasing marketing expenditure when the data suggests retail platforms are winning flows by sharpening their focus on digital systems and adviser serviceability.
Super fund chair remuneration is up this year, averaging around $140,000 as the demands on them and the complexity of superannuation funds increase. With the need for genuinely long-term planning and governance, and on overarching fiduciary duty to members, the role of chair is a unique position in financial services and requires particular skills to do well.
Debby Blakey is set to leave HESTA after more than a decade in the top job and as profit-to-member funds approach the “enormous frontier” of retirement. She says that to maintain their primacy in the face of competition from retail funds, they’ll have to work hard on serving members better.
AMP Super slashed its investment in Bitcoin futures ahead of the abrupt crypto sell-off last week, saying it had been an “excellent test” of its forecasting model’s ability to de-risk when required.
A report by the Super Members Council says it’s the governance of profit-to-member funds that allows them to deliver better net returns to members, lower costs and greater efficiency, and to offer more diversified portfolios. But that has (almost) nothing to do with who sits at the board table.
Superannuation fund chief investment officers now command million-dollar salaries to shepherd the retirement savings of every day Australians, but performance is only part of the equation when it comes to remunerating investors that must think far into the future to get the best outcomes for members.
A new type of product making its way into the lifetime income market holds immense promise for super funds wanting to retain members’ assets when they retire while helping them to maximise their retirement income. But these products could pose some thorny issues for policymakers if taken up en masse.
The unique vulnerabilities of savings in the retirement phase of superannuation have prompted ASIC and APRA to demand funds do more to protect members against cyberattacks, fraud and scams.
The RBA says that while super funds have contributed positively to financial stability “up until now”, they face massive challenges around liquidity and should be considering everything from cyberattacks to another early release program in their planning.
Minister for Financial Services Daniel Mulino has concerns about bringing out the new class of adviser and continuing the Delivering Better Financial Outcomes due to the Shield and First Guardian collapse. Instead, the government’s priority has shifted to adding more consumer protections with an “extensive consultation period” coming.
Despite repeated warnings by regulators to do better, too many super funds remain woefully unprepared to deal with fraud, scams and cyberattacks, the Investment Magazine Chair Forum has heard. The regulators have also told the forum that many funds continue to miss the opportunity to learn from insights provided to them through customer complaints.
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