Numbers might give you some comfort but they don’t tell the whole story, according to CFS. To get that, you have to dig a little deeper – and take a lot of meetings.
The passive giant’s former super boss has found a new home at Bell Asset Management, and comes into the increasingly tough business of active management with his “eyes wide open”.
Chant West Awards focus on the member
It’s actually not easy to work out what’s in a member’s best interests. It can be a complex and difficult question to answer, according to Ian Fryer. The head of research at Chant West says there are many different ways to do all the things that are, in fact, in a member’s best interests.
From an investments point of view, the answer appears fairly simple: get the best possible return over a reasonably long-time horizon. But, almost as important, is the financial planning advice that funds all offer, according to Chant West. This part of ‘member services’, which is a grab-bag of things that super funds do in order to help members get the most out of their services, and, it has to be said, many do not do very well.
Fryer says that this year the Chant West Awards will be focusing primarily on the way super funds have provided their members with the best possible outcomes, across the range of things they do. “This is probably more nuanced than you think,” he says. “As members approach retirement, they really need more help. The very good funds are the ones which provide the most help.”
Fryer says, ahead of the annual Awards night on May 22, at the Ivy Ballroom in Sydney, that, while “investments affect everyone, member services can potentially have a greater impact on member outcomes if members take the right action at the right time… But that requires the co-operation of the member.”
Here’s a personal note: I have been a contributing employer and a member of what is now known as Media Super since its establishment in 1987, as JUST, before it merged with the ridiculously named JEST, the entertainers’ fund, followed much later, in 2008, by the merger with the printing industry fund, Print Super. As a publisher I have put hundreds of employees into the fund over the past 30-odd years. I turn 65 next month and recently had a chat with Gerard Noonan, the fund’s chair with whom I used to work on the Australian Financial Review many years ago. We are both old journos. I said to him that I was embarrassed at how much I did not know about the super regulations, even though I had been writing about super for more than 30 years. He said words to the effect: ‘I know what you mean. When I speak with our financial planners, I find it difficult to understand what they are saying about the rules. The important thing is that you know about the big picture… Imagine what it is like for someone who doesn’t have that sort of background?’
Meanwhile, Ian Fryer says, advice is a lot about access. This is the nuanced bit. Big public sector funds, such as Victorian Super, find it a lot easier to reach their members than multi-employer funds do, because their members are more concentrated in certain locations. “Vic Super does it really well,” he says. “It’s actually about the different models.’ But not every fund can do this. A lot of other funds concentrate on using a panel of external advisors.
He also says that some funds “nudge” members, with the actions they may take to give them better outcomes. They do it through a range of different channels and the good ones do it in a way which drives good behaviour for the members.
For its annual super fund Awards, Chant West gives 40 per cent of its Awards allocation to investments, 30 per cent to member services, 15 per cent to fees (lower is better than higher), 10 per cent on insurance, and 5 per cent on governance. There is also, with the Awards but not the ratings given up to the industry, a little bit of latitude. Governance for the Awards can include some more subjective things.
Chant West conducts about 35 meetings with funds prior to its Awards, gathering more information to help it decide on award winners. Some items like governance, strategy and digital engagement, which are harder to measure, get greater consideration in the awards process and can make the difference between winning and not winning. We are looking for funds that are good now and will continue to be strong for years to come.
The Awards finalists are listed on this edition.
– G.B.
