Brad Cooper: I don’t know if I can add too much to what John’s already saying. We’re doing a small amount, and we would see Hong Kong, Singapore as logical places for us, being hubs of a lot of private bank wealth. But that’s much more about bringing investments into Australia, rather than management of off shore funds locally.
Andrea Slattery: One of the interesting issues is that the SMSF sector is 32 per cent of the Australian market at the moment and is out-performing consistently the rest of the sectors; and the World Bank has also said that Australia’s got the best private pension systems in the world. We’re getting a lot of interest from overseas regulators to look at a possibility of having an SMSF sector within their regime, and the professional capacity of the planners’ profession of providing advice, generally, is considered to be very strong in Australia. While it’s a little left field, it’s actually something that perhaps is an area where we can export our capabilities in those areas as well.
“Why do you need government prescription, through legislation, essentially, putting on the table a product through legislation?”
Rantall: Just to add to that, what we’re doing currently, we’re part of the Financial Planning Standards Board, which is the global benchmark for the Certified Financial Planner designation. We’re recognised as one of the best professional frameworks in the world, and we’ve been asked to go and present to that group on the Australian professional framework we’ve got for financial planners, and how that’s working. And we’re exporting that, probably on a pro bono basis, if I’m truthful, to the rest of the world.
Slattery: So those two areas are actually quite strong, quite robust and it’s an opportunity for perhaps for a niche market consideration in that area as well.
Cormann: We ought to pursue reforms that will make the superannuation industry as efficient and transparent and as competitive as possible, because that is how we will ensure that people do get maximum value. And to the extent there are reforms and changes on the table that will achieve that, like Superstream, then obviously the Coalition will be totally supportive. However, when there are things that we believe can actually have unintended consequences – including, as the Chant West research pointed out, that some 750,000-odd workers could actually end up paying more fees because of the way MySuper might be introduced and that people of course, ending up with lower returns will end up in a worse position even if they end up with lower fees – then these are concerns that confirm what’s already in our minds. I’m sure that there’s other people around the table that would want to say something about it.
Michael Dwyer: Representing First State Super, and according to Jeremy [Cooper] we actually have the model for My Super, and as far as I’m concerned, I want no one else to have it, you know. I don’t want everyone joining me on having the best product in the marketplace. But I’ve got to say, that the product we’ve got has active management as well as passive management in it. We are the lowest cost fund in the country and we’ve returned good returns.
Cormann: Why do you need government prescription, through legislation, essentially, putting on the table a product through legislation? Why can’t we let market forces play out? You’ve come up with an innovative way of delivering value, why can’t we let the market play out and have other providers look at what you are doing, and say, “Well, if we are not going to become more competitive, and do what Michael is doing and we will lose market share”. Why do we need government prescription through legislation to deliver that?
Pauline Vamos: It’s not that. One of the concepts behind MySuper is that you have a vehicle that can be compared on a risk-weighted and return basis, no matter what sector you are in. And if you hold onto that concept, and the transparency concept of actually giving consumers – who don’t want to get engaged in making investment decisions – an ability to compare a MySuper portfolio, then that’s a public policy outcome that I think is trying to be achieved here.
We need to go back to always, what is the issue that is trying to be resolved, and what is the best lever to do that? I agree entirely, legislation sometimes is not. Having clear labels, having clear transparent [definitions] – what is a return; how do you measure return. Warren does it one way, Jeff Bresnahan does it another way, Rainmaker does it the other. We need to actually get serious around that.
Tucker: Those who aren’t interested in having choice or exercising any discretion in investment aren’t necessarily going to sit down and compare 10 funds’ returns.
Liz Westover: I’d like to go back to the FoFA reforms, if I could. It’s probably a big statement to make in this room to say that by and large the financial planning industry has failed to gain the confidence of the Australian people. And while we talk about costs associated with it, we talk about commissions and how difficult it is going to be for financial planners and the like, at the end of the day you can make it as cheap as you like, but if you don’t have the confidence of the Australian people, they will not take it up. And I think we can go back to that analogy about the doctor’s surgery: if your doctor is prescribing drugs on a commission basis, do you trust them?
