Has the Royal Commission pulled back the curtain on super?

Vanessa Stoykov,  creator,  No More Practice

When I was a kid, I loved the original movie The Wizard of Oz. To learn that the wizard was actually a middle aged man behind the curtain - I remember finding that fascinating. No, it was not as cool as having an actual wizard there, but revealing the truth behind the illusion was deeply satisfying never the less.

I have to say, the same can not be about the Royal Commission into superannuation. Yes, once again, we have seen scandalous activity by banks , and apologies on twitter from CEOs. Yet, we have not really seen the inner workings of our biggest super funds - those massive funds that we all see advertised with the cupped hands, saying they are here for members.

As someone who started their career almost 25 years ago reporting on institutional funds management and super, I have seen the growth of superannuation first hand. I know many of the CEOs of those funds, and even helped found the Fund Executives Association back in 1998. I have been passionate about the super industry, and what it represents for people for a very long time.

But I still want to know more. About how they run, how they make decisions, and the kind of people that work there. And if I want to know more, you can bet regular Australians - who have no access to the leadership or even staff members - want to know more too. At some level, there has had to be blind trust in our superannuation industry. While the banks and their model of vertical integration have been pulled apart and looked at from every angle, the business of superannuation is still pretty much a mystery.

I’m not suggesting there’s anything rotten at the core. Not at all. What I am saying is that they remain somewhat of a mystery. Maybe funds believe that people don’t really want to know them. After all, Australians engagement with their super funds has been notoriously low, until they reach a point where they are actually thinking about using their super - usually before retirement and when it is too late.

And financial literacy is a huge issue that funds try and tackle with member communications, sponsorship's, news services and direct mail every day. I have a theory however:

People engage with what they understand. If they don’t get it, they won’t engage with it. As humans we gravitate toward what we know and understand, and away from the unknown.

With this in mind, I have decided to pay more attention, and tell more stories, about the super funds of our country. Their people, strategies and purpose. Why they do what they do. How people can get benefit from engaging with them. I do this in the hope that more people take an interest in their retirement and start engaging earlier.

Because we in the industry know the catastrophic circumstances ahead if people don’t start preparing for their retirement earlier.

Look out for our new suite of content as we move to get closer to, and tell the story of superannuation. A story well worth telling.

Until next time,

 

 


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.

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Lloyd Thomas

28/08/18

Hi Vanessa, after nearly two decades as an adviser I was finally intrigued by the super system so much that 2 years ago I began researching it a lot deeper than the regular PD Day or client discussion level and what I found was staggering. If you intend going down a similar path then for your own interest perhaps start with the company reports and historical P&L's that are available on the web and follow your nose from there. Many are glossy industry marketing docs but some are real and quite detailed. It's these that led me to the greatest revelations but given the inherent complexities, trying to explain some of the findings to clients just left them yawning. Good luck Lloyd

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