Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
CMSF 2020: not as much fun but all the info still there
This year’s CMSF event, which typically attracts 1,200-1,300 industry participants, has gone virtual this year. The program includes 30 sessions and more than 24 hours of viewing. It is a mix of pre-recorded ‘download on demand’ sessions and live to air. And it’s very cheap to attend.
In the first live session, entitled ‘Leadership Lowdown’, narrowcast last Wednesday (May 20), Sally Auld, head of economics research, FX and fixed income strategy for J.P. Morgan, Dee McGrath, the chief executive of ‘retirement and superannuation solutions’ for Link Group, and Nicola Roxon, the chair of HESTA, were not very optimistic about short-term prospects. But each felt, longer term, some good could come out of the crisis.
For instance, Link’s McGrath, said that contact centres, currently dealing with huge volumes of early release applications, would be used for more complex transactions in the future. “We’ve seen email volumes as high as our call centre volumes,” she said. “We’ve already implemented some newer technologies for members and improved chat capabilities.” McGrath joined Link last June from IBM.
HESTA’s Roxon, said that a major challenge for a board was to understand that the industry was in a long-term environment which was constantly changing from regulatory, consumer and markets perspectives. She said that the changes which resulted, such as working from home more frequently in future, had the potential to be a “huge advantage, but also a big risk” for women. Roxon became HESTA’s independent chair in October 2018.
J.P. Morgan’s Auld raised the knock-on impact to Australian GDP growth of a likely slump in immigration. “Over the past five years, population growth added about 1.5 per cent to GDP, but this year that will be down 30 per cent and next year down 80 per cent,” she said. “This will impact the equity market as well as GDP. So, I think we will need to factor in a higher equity risk premium. This will be a longer-term problem than we think.”
Auld, who has been with J.P. Morgan for nearly 12 years, said de-globalisation would create a more inflationary environment over the longer term. “It will require all of us in the industry to think broadly and outside of the box when we ponder the new environment.” She also advised super fund executives to “not panic or do anything silly”, which Roxon said was also good advice for trustee boards.
Roxon said: “One thing we can be proud of is the diversity in thinking we have at the board level of industry funds. We have a lot of variety, but we must learn how to apply it in the most effective way.”
Each of the seven plenary sessions and five of the eight forum sessions for CMSF 2020 are already available to download online. The next live session is a ‘Spotlight on Member Outcomes’, taking place May 29. Total cost for the series for members is $75 and for non-members is $99. This contrasts with about $3,000 plus travel and accommodation costs for the real thing. But, hang the expense, we still miss it. It was to have been held in Adelaide, the City of Churches, this year, which would also have provided a welcome little boost to the local economy after summer’s bushfires.
Info at: https://www.aist.asn.au/Events/CMSF
– G.B.
