Nearly every Australian has super, but its settings don’t work for every Australian, according to the First Nations Foundation, which is advocating for changes around estate planning and the preservation age to make the system fairer.
Betting against acts of God is a great way to make money, but institutional allocations to natural catastrophe reinsurance have stayed relatively static even as some managers are generating double-digit uncorrelated returns.
CheckRisk convinces super funds on risk
(Pictured: Denis Carroll)
UK-based risk consultancy CheckRisk is close to signing up its first Australian superannuation fund for its total risk monitoring system (TRMS) risk tool.
“We’re in discussions with some very major super funds about using some of the tools that we have,” Australian chief executive officer of the company, Denis Carroll, said.
“Sadly people in Australia aren’t as switched onto risk as one would hope they would be.”
That view is backed up by CheckRisk founder and chairman, Nick Bullman, in the group’s latest Weekly Risk Analysis Profile report. The report looks at whether Australia could withstand a slowdown in China. Bullman says there are bigger risks for Australia to worry about right now that are not China-related.
“At present, most Australian investors are riding a wave of strong returns and apparent success. Risk and the consequences of the mismanagement of risk have not been to the forefront since mid-2012. As a result, many institutions are underestimating the risk of a significant drawdown as global risks rise,” Bullman says in the report.
CheckRisk is having some success in Europe with its tools and reports and aims to provide institutional investors, including superannuation funds, easy to understood information and metrics for explaining risk. These are resources that are particularly useful for superannuation fund boards.
“Where I see the value in those reports is bringing trustee boards up to speed with what’s happening,” Carroll says.
“One of the biggest frustrations in the industry for people who manage money on behalf of the industry…take it to their trustee board and they are not on the same page.”
According to Bullman, Australian investors cannot afford to be unaware of the risks building for them.
“These may be blurred now, but they have a habit of becoming clear at precisely the wrong moment.”
