SUPERRATINGS DAY OF CONFRONTATION 2014 Telstra Super nets SuperRatings top fund award By Wouter Klijn Telstra Super last night won the SuperRatings Fund of the Year award at the twelfth annual SuperRatings awards ceremony in Sydney. The award recognises the fund that has the best value end-to-end retirement solution, including both accumulation and pension products. “In a constantly changing superannuation environment, Telstra Super has had an amazing year, performing consistently well across all of SuperRatings’ key assessment criteria,” SuperRatings chief executive Adam Gee said. “This includes a long history of outstanding investment returns, coupled with competitive fees.” The fund’s balanced strategy achieved a return of 15.81 per cent over the 12 months to 30 June 2014, while over a five-year time frame the option returned 10.69 per cent. It also took out the category of Super of the Year, recognising the best value for money accumulation product. Finalists for this award included CareSuper, Catholic Super, First State Super, HESTA, Hostplus, QSuper, REST, Sunsuper and UniSuper. REST Pension won the category of Pension of the Year, recognising the best value for money retirement product. Finalists for this award included AustralianSuper, Auscoal Super, Catholic Super, Energy Super, Hostplus, NGS Super, Qsuper, Sunsuper and Telstra Super. Best new product went to ANZ Smart Choice Paperless Rollover Tool, while the Rising Star Award went to Energy Industries Superannuation Scheme (EISS). EISS was rated as the leading fund because of improvements in member value driven by reduced fees, flexible investment structures, and administration and member education enhancements. IOOF, MLC and REI Super were also highly commended for the improvements made to their funds, SuperRatings said. The Rising Star Award recognises the fund that has most improved its value proposition to members in the past year. The fund that recorded the largest natural increase in funds under Publisher Darin Tyson-Chan [email protected] Crises: just live with them Editor Wouter Klijn [email protected] By Wouter Klijn Journalist Elizabeth Somerville Sub-editor Taras Misko Head of sales and marketing Genevieve Amor-Smith [email protected] Publisher Benchmark Media [email protected] Most super members would be best off maintaining a high allocation to equities well into their seventies, according to Hostplus chief investment officer Sam Sicilia. “If you were not concerned about politics or marketing, you would have people invested in much more aggressive equitytype strategies well into their seventies and eighties, because by the time they get there and medicine has its way, they are going to be living until 110,” Sicilia said. “I don’t support moving people away management (FUM) in the past 12 months was ANZ Smart Choice Super, which has now grown to over $2.1 billion in FUM, servicing over 330,000 member accounts. SuperRatings said the vast majority of funds across all sectors had been hard at work improving their products, services and overall value for money offered to members. “Despite comments to the contrary, our analysis shows that retirement adequacy continues to improve for members, albeit at a gradual pace,” Gee said. The research covered more than 100 MySuper, 320 accumulation and over 170 retirement products in 2014 across all major mainstream super funds. SuperRatings has rated super funds for 12 years and of hundreds of funds rated since it started the benchmarking service, only a handful have achieved platinum ratings each year. “Just eight funds have achieved this status up to this point in time, with Cbus, CSC PSS Accumulation Plan, First State Super, NGS Super, Telstra Super and Vision Super added to this elite group in 2014,” Gee said. during their accumulation phase anywhere from a growth strategy.” He played down the risk of experiencing returns in an unfavourable order, arguing discussing such a risk was only possible in hindsight. “So what about sequencing risk? If [members] did nothing [during the global financial crisis (GFC)] they would have copped the volatility ride down and benefited from the volatility ride up,” he said. “I think in the next few decades we will have five or six GFC-type events. Just live with it.” SUPERRATINGS AND LONSEC: DAY OF CONFRONTATION 14 OCTOBER 2014, IVY, SYDNEY 10 1 2 3 12 4 5 6 11 15 8 7 9 13 14 16 1: Adam Gee (SuperRatings), Jean-Luc Ambrosi, Paul Curtin and Leigh Heyward (all Telstra Super). 2: Melannie Pyzik (QIC) and Brendan O’Farrell (Intrust Super). 3: Lisa Cumberland (IFAA), Andrew De Vries (Diversa Group) and David Woodard (IFAA). 4: Dr Keith Suter (Global Directions), Greg Alder (Greg Alder Co) and Oriel Morrison (CNBC). 5: Tara Moss (author). 6: Jeff Bresnahan (SuperRatings) and Ian Knox (Paragem). 7: Emilio Gonzalez (BT Investment Management). 8: David Erdonmez (Lonsec Research), Licia Heath (Ironbark Asset Management) and Lukasz de Pourbaix (Lonsec). 9: Peter Costello (former federal treasurer). 10: Nathan MacPhee (SuperRatings). 11: Dan Campbell (BT Investment Management), Vy Pham (BT Financial Group), Jeremy Dean (BT Investment Management) and Rebecca Riant (Westpac Institutional Bank). 12: Jeremy Gordon (Challenger), Chris Clayton, Andrew Mouat (both BT Investment Management) and Greg Hansen (Challenger). 13: Charles Genocchio (Vinva Investment Management), Peter Lambert (Local Government Super), Dascia Bennett (NGS Super) and Doug Carmichael (Commonwealth Bank Group Super). 14: Alex Hutchison (EISS). 15: Tom Sammann (Catholic Super) and Steve Grant (Auscoal Super). 16: Robyn Petrou (Energy Super). SUPERRATINGS DAY OF CONFRONTATION 2014 Costello calls for more focus on retired members By Wouter Klijn Former treasurer Peter Costello has called on the superannuation industry to spend more time thinking about its members, especially what happens to them when they transition to retirement. At the SuperRatings Day of Confrontation in Sydney on Tuesday, Costello argued there was too much focus on contribution levels during accumulation and not enough on the end benefits that finished up in members’ pockets. “What I find remarkable about the industry is that it doesn’t put nearly enough time into the benefits; what actually ends up in the hands of people,” he said. “Not just during the accumulation phase, there is a lot of interest there, but during the retirement phase. “We kind of lose interest in people when they turn 60 or 65, when they are no longer accumulating. It is not our business anymore.” But for members this is actually the time they fully engage with their superannuation. “For the people for whom this industry exists that is what really matters: what happens at 65,” Costello said. “What product am I going into? What is my annuity going to be? What is my pension going to be? What is my clawback on the age pension? “It is almost as if the industry has lost interest, because you are no longer bringing any cash flow into our fund. “But from a person who is in the system, this is where superannuation really gets interesting: when they retire, not when they are still accumulating.” But he did not just blame the industry. “I confront you as an industry, but I think the government has not nearly paid enough attention to this. The point is the benefits, contributions are only a means to an end,” he said. The theme of the SuperRatings conference was “What about me?” and Costello had a very simple answer to that: it is not about you, it is about the member. Third-party advisers part of service solution Impact investing chases sustainable profits By Elizabeth Somerville By Elizabeth Somerville With the average member-to-adviser ratio of a not-for-profit super fund sitting around 20,000 to one, a huge opportunity existed for financial advisers and industry super funds to work together for the benefit of members, Lonsec Fiscal Holdings joint chief executive Nathan MacPhee said yesterday. “It still shows that the average not-forprofit fund, even if it doubles, triples its adviser capability, is never going to have the scale to be able to service all its members,” MacPhee told the SuperRatings Day of Confrontation in Sydney. “Even the best not-for-profit fund has an adviser-to-member ratio of around about one to 3000, so that’s still going to be about 10 times the average financial adviser’s level of relationship.” To successfully service the large number of members within industry super funds, relationships with third-party advisers needed to be developed or not-for-profits could risk losing members, he said. “I always see industry funds liaising with advisers as a retention opportunity,” he said. “If you look at the top four industry funds in this country, they have 6 million members; that’s half of the workforce. Those funds are never going to have the scale to service those members. “They need to develop those relationships with third-party advisers.” FPA chief executive Mark Rantall said involving a financial planner would ensure individual member needs were serviced appropriately. “If an individual wants personal advice, they must be referred to a professional, qualified financial planner who is acting in their best interests,” Rantall told delegates. MacPhee said putting members first benefited both financial advisers and industry super funds. “Everyone will benefit from interacting and putting the members first,” he said. Impact investing is reshaping the way consumers think about ethical investment funds by allowing firms to choose rather than exclude investment product opportunities. “[Impact investing] is doing good in the community and not just excluding [investments],” Christian Super chief executive Peter Murphy said of this approach to investment options. “What we’re really trying to do is get a good return and make a social impact.” Impact investment opportunities include options as diverse as sustainable agriculture, microfinance, microinsurance, renewable energy and community projects, all of which are currently used by Christian Super. “It’s a new area, but it’s the same theme [as other investment approaches]: getting a good risk adjustable return, being sustainable and making it profitable,” he said.
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