FSC calls for greater unity in the superannuation sector and end the age-old rivalry between industry and for-profit funds
The Financial Services Council (FSC) has called for greater unity in the superannuation sector in an attempt to end the age-old rivalry between industry and not-for-profit funds on one side and commercial and master trust funds on the other.
The rivalry has stood in the way of presenting a clear voice to the government and stalled efforts to make policy progress, Blake Briggs, Chief Executive Officer (CEO) of the FSC, said.
“Since taking on the role of CEO at the FSC, I have learnt a clear lesson on the importance of industry unity to achieving effective advocacy in Canberra and with regulators,” Briggs said at the PritchittBland Communications New Year Reception held in Sydney yesterday.
“At times the financial services sector has been its own worst enemy, with multiple competing bodies fighting amongst themselves, sometimes over esoteric questions of policy design,” he said.
Consolidation and maturing of the superannuation industry has also caused a blurring of the lines between the organisational structure of funds at the larger end of the scale, to the point where the very large industry super funds now very much look like the big financial services firms that have formed the traditional member base of the FSC, Briggs said.
The modern reality of the superannuation industry is that the days of a hundred small funds being run like a cottage industry are over. Most funds are modern, complex financial services companies with sophisticated funds management, financial advice and governance arrangements in place
“The modern reality of the superannuation industry is that the days of a hundred small funds being run like a cottage industry are over. Most funds are modern, complex financial services companies with sophisticated funds management, financial advice and governance arrangements in place,” he said.
“In fact, the large not-for-profit funds often look more like the FSC’s members than they do their smaller industry fund peers. This is a positive development, the industry is better positioned and has the scale to cater to the diverse and complex needs of its consumers.
“The representation of the industry, however, needs to keep pace with the sector itself, and the days of industry bodies with parochial views and deep political alignment should be a thing of the past,” he said.
A greater unity in the industry might also help end the ‘superannuation wars’ – the constant tinkering of Coalition and Labor governments with superannuation laws and guidelines in order to put their stamp on the system. These wars have led to a constant stream of new regulations, which many industry participants feel has eroded member trust in the system.
Briggs illustrated his point with a reference to the mandatory service standards for the super industry announced by the Federal Government earlier this week.
“Would we have had the same political intervention we saw this week in group life insurance and death benefit service standards if the superannuation industry had been more aligned in addressing these issues?” he asked.
“I would support the industry and its associations having a discussion around how we can work more closely as a sector, or whether we will allow some of the historic, tribal leaders to continue to pull the industry into rival camps,” he said.
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