Industry superannuation funds’ direct connection with investors and their not-for-profit business model will elevate them into major players within financial services.
Retail industry veteran Chris Cuffe, who is on the board of industry fund Unisuper, said these factors would allow industry funds to play a larger role in the market.
Cuffe, who also sits on the board of financial advisory group Fitzpatricks Private Wealth, said at a Morningstar Investment Conference yesterday that his position with both groups gave him a bird’s-eye view of the two sectors.
“In discussions with a colleague I told him that the big end of town will be industry funds because I feel they are more in touch with what consumers want and because they are also non-profit,” Cuffe said.
“However I also believe in the value of good financial planning advice, which I am involved with via Fitzpatricks.”
Cuffe also expressed scepticism about the ability of investment managers to perform under the scrutiny that they have found themselves facing in recent years.
“It is bloody hard to get alpha, and I wonder if managers can actually do it. I think there is a small group of managers who can extract value, but it has to be over the long term. To see good managers do good work takes at least three years,” he said.
“Yet even when they have had a bad time, is it really bad? There is a need to look at how well they perform when everything else blows up.”
