In today’s increasingly uncertain environment, broadening investment exposure beyond traditional bonds and equities is becoming not just prudent but essential. But two guiding principles offer investors the best potential outcome and protection in a portfolio: never bet against America; and when in doubt, diversify.
The Retirement Leaders Summit provided a compelling insight into progress made by superannuation funds in fulfilling their Retirement Income Covenant obligations. While regulators continue to berate the industry for being too slow, The Conexus Institute has identified three things it says are coming down the pipeline that could significantly speed up funds’ responses.
AustralianSuper chief executive Paul Schroder has used an unprecedented National Press Club address to make the case for reforms including on financial advice laws, a ‘build to sell’ housing investment model and the Your Future Your Super performance test. The boss of the $400 billion mega-fund defended the governance and ambition of what he described as a globally unique “Australian rules retirement” system.
Paul Schroder’s invocation of Kenneth Hayne’s financial services royal commission in a high-profile national speech might have been in jest. But as the sector – and the $400 billion mega-fund he leads – comes under rightful scrutiny over poor member service standards, it could come back to haunt him.
Cbus has removed a major barrier to low-income members accessing tax-free retirement products by eliminating its minimum application requirement for opening an account-based pension, in a move policy and consumer groups say they want to see replicated across the industry. Cbus chief executive Kristian Fok says he wants the government to make changes to help low-balance members further, including removing minimum drawdown requirements.
The $350 billion Australian Retirement Trust is moving towards “total portfolio management” and joined-up investment thinking to better manage its FUM and the liquidity demands being placed on it by private and offshore assets and member needs.
A mere seven products failed the latest iteration of the YFYS performance test, the results of which were released on Friday. The test looks less and less fit for purpose as more and more funds learn to live within its constraints, but some of its biggest problems stem from its application to the smallest parts of the industry.
As big super funds send more and more member money offshore, Brighter Super says its commitment to investing another $500 million in its own backyard is turning up assets it might not have found if it looked further afield – not to mention Olympic opportunities.
The Association of Superannuation Funds of Australia, led by CEO Mary Delahunty, has ordered a formal review of its unit providing technical regulatory services relating to SuperStream and other complex industry plumbing projects. The review, conducted by former IFM Investors executive Amara Haqqani, follows the defection of longstanding ASFA executive Hans van Daatselaar and his team of boffins to the rival Financial Services Council.
The chief innovation officer (CINO) is a role that combines the qualities of visionary, super persuader, and coach. It has gained traction in industries facing intense disruption and digital transformation, and now it’s coming to superannuation. The forward-thinking leadership embodied in the role will be critical in the long game of super and the transformation required to best serve the wave of retirees engulfing the system.
Team Super CIO Seamus Collins says the superannuation industry is “way too product focused” when it comes to retirement. Ahead of the Investment Magazine Fiduciary Investors Symposium in Healesville, Victoria, Collins says some form of soft default might be required to meet the needs of millions of members in the “missing middle”.
Super funds are under increasing pressure to develop cost-effective and flexible retirement income solutions, but they do not necessarily have to solve every part of the puzzle on their own. Partnerships with providers who bring deep expertise, additional execution grunt and valuable learnings are a critical component of success.
The investment intelligence behind Australia’s largest asset owners and their teams
In-depth interviews with leaders, experts and visionaries in the institutional investment community
Updates on the latest industry policy developments and regulation
The challenges and innovations of custody, technology and operational due diligence
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.
We acknowledge the Traditional Custodians of this land upon which Conexus Financial sits, the Cadigal of the Eora Nation. We recognise their continuing connection and unique cultural and spiritual relationships to the land, waters and community. We pay our deepest respects to them and their culture, and to Elders both past and present.
