The industry fund has taken a 49 per cent stake in subscription vehicle provider Splend alongside IFM and other co-investors as it looks to build a 10 per cent exposure to climate solutions in its global portfolio.
After years of powering super returns into the double digits, US equities are walking a tightrope, and one misstep could send them plunging to earth. But the story that put them up there in the first place still holds true.
Super funds prove their worth during crisis
“They did what they have always set out to do. They helped their members to achieve a good outcome. And they came to the party at a time it was important to do so,” said Ian Fryer as he oversaw judging of the Chant West Awards for 2021.
Speaking last week (April 7) as funds were being advised whether or not they had become finalists in 10 out of the 12 categories for the annual awards, Fryer, the Chant West general manager and former head of research, said: “Super funds in a crisis have done an even better job than normal.”
He said: “We’ve spoken to 30-or more funds in the past few weeks and we’ve been very impressed with how they’ve engaged with members during the past year. The funds asked themselves what they could do to help members to understand what it all means for their super. The staff who usually ran employer relations people hit the phones and the education teams got on with making podcasts and videos and micro-sites as well as manning the phones to answer the huge volumes of calls.”
On the investments side, they re-assessed their asset allocations, he said, to ensure they had the liquidity to handle sudden drawdowns. “They showed they were not a cottage industry,” Fryer said. “The funds consist of high-quality seasoned professionals. In the first instance they ensured liquidity and that members’ balances were protected so, when the opportunity arose, they could grow the balances by investing in equities again as they rose … They got it done and the results for members have been significant.”
Funds had a range of communications about the Early Release Scheme (ERS), he said, and the vast majority had a position which was something like: “if you can avoid taking it out then you should consider retaining it in super for the long-term gain, but if not, you do what’s best for you”.
Fryer said that the Government’s recently concluded JobKeeper payments program had helped a lot. The ERS withdrawals would have been a lot more in total without it.
The satisfaction scores obtained by funds, known as ‘net promoter score’ (NPS) were “extraordinary” last year, Fryer said. They were often up in the 60s to 80s for members who interacted with the fund. To put that in perspective, when asked various questions after an interaction, such as ‘would you recommend this product?’ to rate 9-10 on an NPS is positive, 7-8 is neutral and anything less is negative (then adjusted as a percentage). “This shows they were there when the members needed them,” he said.
The two main criteria in the Chant West Awards judging are investments, which are given a 40 per cent weighting, and member services, which includes communications, given a 30 per cent weighting. Chant West has so far communicated the finalists for 10 categories, with the final two to be decided soon (see separate report this edition).
The awards will be presented at a black-tie dinner at Sydney’s Ivy Ballroom on the evening of May 26. Further details on the Chant West Awards site here.
Fryer said it was evident through the judging process that funds had learned a lot from the crisis too, including what had worked well. “Financial advice is an obvious one. Now they can see that they can do a whole lot more remotely, even providing comprehensive advice, and the greater efficiency in using remote delivery when possible … They also learned a lot about using a genuinely interactive video environment through webinars to address issues in an effective way.”
He said there had been big improvements in making better use of data so that messages to members could be more relevant. “I’d like to see all funds using data to improve communications and make them personalised to each member. The funds which are better at it tend to be the larger ones which have put a lot of resources into it. Doing this well costs a lot of money.”
