POWERED BY MOMENTUM MEDIA
Retail funds are “on the operating table”
Retail superannuation funds are “on the operating table”, according to some major industry chief executives, and what state they emerge from surgery with will depend on how they’re able to look after members’ best interests.
Speaking at the Bloomberg BuySide Forum in Sydney today, a panel of industry experts painted a bleak picture of the state of change retail superannuation funds are facing, as they undergo scrutiny following the Banking Royal Commission and ever-growing numbers of both members and default mandates go to industry funds.
Sunsuper chief executive, Scott Hartley, compared this period of flux currently faced by the retail superannuation sector as akin to surgery, as the funds were “all having intense focus put on them”.
“I think that they can emerge from the operating table, but they might lose some limbs,” he said, predicting that if they’re not looking after member interests, they won’t survive.
Financial Services Council chief executive, Sally Loane, was optimistic about retail funds’ recovery, but she didn’t deny that a large portion of her organisations’ member base were currently facing problems.
The Banking Royal Commission and the “great unwind of the big five,” which started before the Royal Commission, put them on the operating table, she said, but innovation, particularly in driving member engagement, will help them get back off it.
“The great thing about competition in any manner is it lets those who have taken a hit … come back in a very competitive manner,” Loane added.
Mercer chief executive, Ben Walsh, continued with Hartley’s operating table comparison, saying that the path to recovery could well reflect a wider change the industry had been seeing for years.
“There’s been a great convergence on the way for seven to eight years”, he said, with small funds expanding their capabilities and large ones simplifying their offerings. As a result, retail funds would come off the operating table with more simplified offerings, lower fees, and “stronger than ever”.
It’s worth noting, as Walsh did, that this change would tie into the Morrison Government’s desire for a better default system for members, which was reinforced in a talk by Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, today.
Recommended for you
ASFA has urged greater transparency and fairness in the way superannuation levies are set and spent.
Labor’s re-election has reignited calls to strengthen Australia’s $4.2 trillion super system, with industry bodies urging swift reform amid economic and demographic shifts.
A major super fund has defended its use of private markets in a submission to ASIC, asserting that appropriate governance and information-sharing practices are present in both public and private markets.
A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
36.96 3 y p.a(%)
3
GAM LSA Private Shares AU I
34.22 3 y p.a(%)
4
VanEck Video Gaming and eSports ETF (AU)
28.89 3 y p.a(%)
5
Plato Global Alpha A
28.83 3 y p.a(%)
