ASFA 2016 day three - conference wrap up

 

 

There is a risk that conferences are considered as merely an opportunity for networking, selling and socialising. However, the 2016 Association of Superannuation Funds of Australia (ASFA) Conference seemed to collide head on with some very real challenges and opportunities which face Australia’s retirement income system over the coming years.

 

Day One – a new normal

A long shadow cast over the conference as news trickled through the luminous glow of smartphone screens in a darkened auditorium of the Gold Coast Exhibition and Conference Centre that the US elections had not gone the way that almost all in attendance would have hoped. However the mood had already been set, with geopolitical forecaster and bestselling author Dr George Friedman knitting together a narrative of the geopolitical instability and uncertainty.

This narrative tackled the growing challenges to both the economic and policy environments which superannuation fund trustees face over the coming years, highlighting just how abnormal or unique the post cold war period between 1991 and 2008 had been. As Friedman delivered his message that we would need to adjust to a new normal, the auditorium thinned noticeably as news apps pushed notifications through to delegates that Florida had been won by controversial Republican candidate Donald Trump.

Against this sombre backdrop, former Prime Minister John Howard took to the stage and was slightly taken back by the size of the audience, remarking that it reminded him of old times. Mr Howard provided a strong keynote which emphasised the importance of a prosperous middle class in ensuring political stability, and the critical role which the superannuation system plays in ensuring that the global trade environment benefits the Australian middle class with an adequate, if not comfortable retirement.

Day one was punctuated with an astute and clear reminder from Richard Jackson from the Global Ageing Institute about the demographic shock which is fast approaching many western economies. With the old age dependency ratio primed to make heavy shifts in the coming decades, Jackson provided a reminder that the world was paying attention to the Australian retirement income system, and that there was much at stake in ensuring it delivered.

While the mood from day one may have been challenging, or even confronting for many delegates, it was important in emphasising the importance of those trusted as guardians of the superannuation system understand the significance of delivering on the retirement income objectives of Australians.

 

Day Two – digging deeper

The second day of the ASFA conference is the core of substantive content, with many focus sessions covering all aspects of the sector. Incoming ASFA CEO Martin Fahy got the second day of the conference underway, and was followed by Dr Don Peppers who approached the traditional fiduciary relationship between trustee and beneficiary from the perspective of consumer behaviour.

Fashion doesn’t get mentioned in the same sentence as superannuation often, however the internalisation of the tactical aspects of the investment management function has certainly been in vogue. Launching the ASFA best practice paper on the topic, Qsuper CIO Brad Holzberger lead of an accomplished panel in taking a responsible approach to determining whether funds should be considering bringing aspects of investment management in house, and some of the key benefits and challenges in doing so. While the panel considered that there might be some efficiency of scale in saving on fees, there are very real operational risks in the transition. The panel highlighted that the transition was natural for larger funds, and that there remained an important place for well performing investment managers and asset consultants in a well functioning system.

Hoping to find my way into the session focusing on the work of the Productivity Commission in reviewing competition and efficiency in the superannuation system, I stumbled into the wrong theatre and a profoundly inspiring sessions focused on courage and compassion. First, Catherine McGregor provided an eloquent, moving and humorous personal account of the challenges of identity and the profound impact that compassion can have on supporting us through difficult times. She was followed by Nic Marchesi and Lucas Patchett, founders of Orange Sky: a simple yet profound initiative based on providing free and mobile laundry and shower facilities to the one in 200 Australians who does not have a home. While not on the technical specifics of superannuation, this session drew a wonderful connection with the need for courage and compassion in pursuit of social policies for better retirement outcomes for Australians.

 

Day three – before the exodus

Kelly O’Dwyer drew the unenviable keynote session at 8:30am on the morning after Jimmy Barnes with daughter Mahalia Barnes’ enthusiastically embraced rendition of “Working Class Man” to a room of white collar financial services managers. The Minister reiterated the government’s policy positions, and was emphatic in highlighting the importance of the superannuation system to Australia’s long term prosperity.

In a well attended session bringing together Senator Katy Gallagher with the leaders of the Financial Services Council (FSC), Australian Institute of Superannuation Trustees (AIST), Industry Super Australia (ISA) and ASFA, the political and policy environment of Australia’s retirement income system was put under the microscope.

Attended by such a broad spread of representative bodies from across the spectrum, the most striking aspect was the consensus between leaders on the need for the reforms which are currently before Parliament. The proposed objective was supported, however there was strong support for additional consultation time to discuss the possibility of incorporating adequacy or sustainability in the objective, and the inclusion of insurance in the ancillary objectives. Similarly there was strong support for reform of the tax concessions… possibly the first time in human history that a group of commercial representatives have advocated that they are to be subject to greater taxation.

The conference was closed out by inspirational keynote presentations from Anna Meares OAM and John Bertrand AO, before David Strassman gave delegates something to laugh about over the closing lunch. ASFA did an excellent job in ensuring that the conference delivered relevant substantive content to delegates, while doing so in an enjoyable manner. Sydney will host the 2017 conference, and QMV will look forward to being a strong supporter of ASFA, the superannuation system and the Australians who depend on a well functioning retirement income system.

Best regards

 

Jonathan

Jonathan Steffanoni
Principal Consultant, Legal & Risk

 

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