First published in QLDdirector, an Australian Institute of Company Directors publication Those who...
Super-Ambition Funds of Australia
I am looking forward to the Association of Superannuation Funds of Australia (ASFA) conference in February, and I am particularly keen to hear the different perspectives of the industry’s leaders while everyone is in Brisbane.
Ambitious Industry Agenda
The Australian superannuation industry is immersed in a rapid transformational phase, which is placing unprecedented demand on Chief Executives, their leadership teams, trustees and boards and even the industry's regulators. Its hard to imagine a more ambitious agenda, where the majority of funds are:
- Adapting their members acquisition model, enhancing outcomes and creating added value to retain their current members in response to the disruptive changes in legislation whilst they are simultaneously involved in mergers discussion or execution that will leave a handful of “mega funds” and niche-focused superfunds
- Maintaining robust governance, risk and crisis management, and effective decision making, consistent with their risk appetite, while the regulators' increasing demand for scrutiny, cost reduction and “acting in members' best financial interests” dominates the change agenda for the industry
- Reconsidering their investment operations' effectiveness and efficiency, also considering the foreseen massive AUM increase, to meet the new stakeholders' expectations and add tangible value to their members
- Adjusting their operating models by building more effective member-centric organisations and boosting internal competencies to overcome the implications when core capabilities are outsourced to third parties whose commercial interests vest in customers paying more
- Investing in digital technologies, data analytics tools and skillsets to underpin their new strategies, face the flourishing financial crime and cyber threats and integrate and optimise their internal systems following acquisitions and mergers.
- Addressing the strategic imperatives, particularly in terms of the outcome adequacy, for their members who retire ahead of the accelerated retirement rates
- Meeting the increased need of members to be "advised" and informed and to actively participate in their future by adopting software and tools, in a logic of reverse engineering, that allow them to adapt their contribution behaviours over their professional life to achieve better results during the retirement phase.
Undoubtedly, we will explore these topics in Brisbane... and will likely hear why additional priorities should be added to the list.
The unrelenting pressure for funds to adapt in response to the changing needs of members and growing expectations of other stakeholders will continue to shape the industry agenda. But it's the enterprise perspective that only the executive leadership team can orientate themselves with that will determine how each fund plans and executes the transformation at an operational and tactical level.
We all recognise the "what and why" of the competing priorities that fuel industry ambition. The executive teams that win the transformation race will be those that maintain an unrelenting focus on "how" our organisation gets there, no matter where we find ourselves today.
The views expressed in this article are the views of the author. This article provides general information, does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information.