After a year that will live in infamy for the construction industry fund, Cbus has announced double digit returns across two of its products. Meanwhile, CIO Brett Chatfield is scrutinising the potential market impact of Trump’s policy agenda.
Jun Bei Liu and Jason Todd want to shoot the lights out with their newly-launched long-short hedge fund, but they also want to explore new distribution models and client segments as they strike out on their own.
What big funds can do to retain members
(Pictured: Garry Weaven)
Garry Weaven is “sanguine” about the leakage of members from big super funds to the SMSF market, but his old boss at Westpac, Ian Macoun, is not. Nor were too many others as relaxed, at the FEAL national conference, about the estimated A$16 billion which was transferred to SMSFs last year.
The benefits of FOFA, which will effectively ban commissions from funds management companies for financial planners, were understated, Weaven told the conference in Melbourne last Thursday. This was a piece of legislation which would have far-reaching consequences.
He did not doubt that crooked planners would always exist, but at least they would not have the same level of financial incentives to push clients into an SMSF when this was not appropriate.
Ian Macoun, the chief executive of the multi-affiliate manager Pinnacle, took issue with Weaven’s view in a question from the floor at the FEAL conference. He was very worried, he said, about the transfer of funds to SMSFs for various reasons including the likely high allocation of the money to fixed interest and property.
Macoun is a former chief executive of the old Westpac Investment Management in the 1990s, which was effectively outsourced with the bank’s purchase of Rothschild Australia Asset Management followed by Bankers Trust Australia. In his first commercial move after leaving his assistant secretary spot at the ACTU and having played a crucial role in the establishment of industry super, Weaven did a brief stint at Westpac to establish the company’s wholesale property trusts.
“You can say whatever you like Ian,” Weaven joked at the FEAL conference. “After all, you used to be my boss.”
The session focused on initiatives big funds could take to step the tide of high-value members forming their own SMSFs. These included the establishment of a member-directed platform, the provision of other retirement services such as medical insurance and access to retirement services, and the adequacy of available annuities.
Patrick Liddy, the principal of consultancy MSI Group, and Graeme Arnott, the COO and deputy CEO of First State Super, addressed the issue from different perspectives. Liddy said the new-style platforms would revolutionize the way people invest and many people in the super industry did not yet appreciate the trend. Arnott, whose fund may choose to go down this path through its administrator, Pillar, was more philosophical, suggesting that funds “can’t be all things to all people”.
Liddy listed funds which had either announced the introduction of member-directed options or were “seriously considering” doing so. They were: Telstra Super, HostPlus, Cbus, Pillar, QSuper, Legal Super, Auscoal, REST, AustralianSuper, CARE and HESTA.
Arnott said that surveys of people leaving First State Super to set up an SMSF showed that they primarily wanted more “flexibility” with their investments. However, flexibility already existed within the funds, Arnott said.
“Our responsibility (as fund executives) is to educate, build awareness and support informed decision making,” he said.
(See Liddy’s commentary on the FNZ roadshow, also this edition).
