That HESTA could have done a better job on its admin transfer is not in doubt. But at a time when regulators are piling on the pressure for funds to improve their operational and member-facing infrastructure, APRA’s reaction is counterproductive.
Bitcoin and the technologies that underpin it could disrupt the entire finance industry, and it’s “beholden upon everyone” to learn about them even as they make up their own minds about what to do with them, according to a panel at the Professional Planner Researcher Forum.
The government will introduce a cooling-off period for consumers switching super funds, limit “inappropriate” financial advice fee charging and make changes to anti-hawking laws in a win for profit-to-member super funds. But they will also have to contribute to the Compensation Scheme of Last Resort.
The government’s package of consumer protection reforms are well intentioned and address issues that led to losses in the First Guardian and Shield managed investment schemes. But there are some thorny questions that need to be answered before a so-called “waiting period” for fund switching can be said to be in members’ best interests.
The spectre of a standalone regulator for the superannuation sector has been kept at bay partly through increased collaboration and alignment between the Australian Securities and Investments Commission and Australian Prudential Regulation Authority, especially on the Retirement Income Covenant. But shifting deckchairs at the two agencies, and the increasing systemic importance of the super sector, make the “twin peaks” project a perennial work in progress.
The legislated purpose of superannuation is to deliver income for a dignified retirement and under the Retirement Income Covenant trustees are required to support all members approaching or in retirement, regardless of account balance, engagement with super or access to advice. Most trustees would admit there is still work to be done, and APRA will continue to push funds to do better.
The success of Australia’s superannuation industry to date cannot be an excuse for trustees not delivering on the essential promise at the heart of the system to help members – customers – fulfil their retirement ambitions. But many trustees are limping, not running, towards implementing retirement solutions; and they are overlooking a “golden thread” between robust governance, placing members at the centre of decision making, and better retirement outcomes.
Getting members information and advice earlier in their superannuation journey has a significant positive impact on their confidence in retirement, according to Brighter Super, and might provide a more holistic outcome than the soft defaults currently being considered at the system level.
The Conexus Institute has commenced a research project on superannuation fund trustee board skills, composition and competency, seeking to bring an evidence-based fact set to a controversial conversation that continues to dog the sector. A sneak peek at the research will be unveiled at the annual Investment Magazine Chair Forum, which will be attended by sector leaders including the chairs of ART, Cbus, Hesta, Hostplus, UniSuper, MLC and Mercer.
Investment Magazine can reveal that the Brisbane-headquartered Brighter Super has appointed its head of diversified portfolios David O’Donnell to head up investments until a permanent replacement for Mark Rider, its former CIO of four years, is found.
There will always be questions about private asset valuations, and super funds can do more to make them robust and consistent. But the ability for members to switch rapidly between options will always be problematic, and might need to be reassessed.
Australia’s “Super Six” are helping shape the direction of institutional investing globally, according to a new report from the Thinking Ahead Institute, which says that asset owners all around the world must move quickly on AI adoption to “stay ahead of the curve”.
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Investment Magazine provides in-depth, monthly analysis of trends and developments for all the businesses in which superannuation funds engage‚ including asset allocation, investment manager selection, custody and fund accounting, member administration, group insurance and compliance.
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