Superannuation industry at the forefront of ‘fiduciary capitalism’

Large Australian asset owners are well positioned to lead the way as the world's financial systems move towards a new era of ‘fiduciary capitalism', CFA Institute president and chief executive John Rogers says.

Set to address the CFA Institute Australia Investment Conference in Melbourne, Rogers said Australian pension funds in particular were focusing more on the long-term objectives of their beneficiaries rather than potentially damaging short-term profit motives.

According to Rogers, the agenda of fiduciary asset owners now involves minimising costs, making sure their assets match their liabilities and taking into account all external forces that result from their investment activities.

"Australia has a well-developed fiduciary environment given the rise of the compulsory superannuation, which started with Paul Keating," he said.

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"Australian super funds have been at the forefront of development and adoption of socially responsible investing (SRI), for instance."

A recent CFA and Edelman investor trust study found that 53 per cent of the 2100 retail and institutional investors in the US, Hong Kong, Australia and Canada surveyed had trust in investment firms. When the figure was split, the survey revealed that retail investors were less trusting of the industry (52 per cent) than institutional investors (61 per cent).

The Stronger Super and Future of Financial Advice regulatory reforms had been a step in the right direction in steering Australia's investment industry towards a more transparent system, Rogers said. The Coalition Government now had the opportunity to build on this legacy.

"However, it is up to all, including CFA charter-holders, fund managers, brokers, advisers and regulators, to build a more a robust and trustworthy financial system," he added.