When will the super system reach maturity?
When will Australia’s super system reach maturity? This is an important question for management teams across the industry, whether working for a super fund, an asset manager, or a service provider. What does maturity mean anyway? In a typical industry, it refers to the top of the industry “S” curve, where revenue growth has slowed […]
Read more...SMSFs’ compelling value proposition
Wealth industry executives sometimes struggle to understand the steady stream of their members to SMSFs. In a recent ASFA debate of the Pros & Cons of SMSFs (click here for an edited version of the slides), we worked through the case for SMSFs, concluding that the SMSF value proposition can be irresistible, particularly to high […]
Read more...Lowering super’s cost structure – what are the trade-offs?
What are the trade-offs involved with reducing the cost structure of super? One of the problems with the Grattan Institute view is that it essentially argues that a free lunch is available – ie you can slash costs in super, such as removing active asset management, without any negative consequences. Not only is this highly […]
Read more...FSI Interim Report – super gearing gets the thumbs down
If the Financial System Inquiry (FSI) interim report raises some difficult questions for collective super funds, it also does the same for the SMSF segment, particularly in respect of gearing. The FSI interim raises the idea of restoring the general prohibition of gearing within super, other than for liquidity purposes. It notes the SMSF gearing […]
Read more...FSI Interim Report – cut super costs, cut active managers
Financial System Inquiry – how do you cut the costs of super? The interim report of the Financial System Inquiry runs to 460 pages, with 30 pages devoted to the efficiency of the super system. We’ll look at some of the main issues over the coming weeks. The key observation is that there is limited […]
Read more...Yes, a super fund does need a business strategy
There’s a general sense that APRA is making life harder for super funds of all stripes, as part of an effort to drive up management and board standards, and encourage industry consolidation. We’ve written previously about SPS530, which raised prudential standards for investment governance. Its requirements for an overall investment governance framework, and an investment strategy, […]
Read more...Unisuper’s Westfield battle a sign of things to come
The recent dispute between Unisuper, other investors, and Westfield over the restructuring of Westfield Retail Trust (WRT) as “Scentre” provides a great case study of the changing investment priorities of Australia’s super funds. Notwithstanding that the proposal ultimately succeeded, it failed on the first attempt to get 75% approval due to the opposition of a group […]
Read more...Award default super: where to now?
For a process with so much at stake, the Fair Work Commission (FWC) review of super defaults for the 120 or so modern industrial awards (a cornerstone of Australia’s workplace relations system) has turned into quite the shambles. Award defaults determine the flow of a significant minority of compulsory super contributions. It’s not the only […]
Read more...Gearing and the missing SMSF taxes
Having established that the SMSF segment has not paid a decent amount of net taxes since 2009, we’ve drilled a bit down further into the SMSF tax return data. The key drivers of the missing SMSF taxes are (a) around half the assets in the segment are in the (for now) tax exempt pension phase; and (b) […]
Read more...UK review highlights potential savings from fund mergers
A just released UK report into public sector pension fund costs also highlights the potential for Australian super funds to achieve cost savings for members via mergers. The report, which can be found here, was prepared in respect of the UK Local Government Pension Schemes – 89 separate but sub-scale local government funds – to identify […]
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