The acceleration of change witnessed across the world in 2020 will continue this year; far from being immune the superannuation sector will be debased further in 2021.
Many will fight change, either instinctively or strategically in an effort to protect the status quo and their interests in it.
Last year was telling in so many ways – when important questions were raised, groups with the singular purpose to represent the industry’s interests showed their true colours by putting factions above the broader society they serve. This naked self-interest was and continues to be duly noted by politicians who in 2021 will be even more emboldened to move swiftly to try and force a better deal for members.
Government is confident it has populist support for reform in the superannuation and financial services sector which is clear by the way it has been appealing to myopic behaviours and populist slogans such as “It’s your money”.
The question as to whether proposals by policy makers will lead to a better deal for members or actually hurt those who they’re designed to serve is not yet clear. One certainty is that change will be forced.
There are many milestone discussions taking place right now to point to, with ramifications for the industry expected to flow from the Your Future, Your Super proposals which are likely to move swiftly through parliamentarian hands in the first half of this year.
The role of regulators and agencies such as ASIC, APRA and Treasury this year will be an important consideration for those watching and participating in the passage of change; the ongoing reviews by government of the securities regulator and appetite for the Treasurer and Minister’s office to move unilaterally with information already to hand begun last year should continue in 2021.
The mainstream superannuation guarantee debate will reach a crescendo too as the cost-of-super-to-wage-growth conundrum finds the answer that fits best with the government of the day’s economic policy intentions. Trite narratives harking back to the original intent of the system in the 1980s will carry less weight as people expect a better deal from the system. Certainty of wage increases will be an important test for government should the original plan for super be rewritten.
Amidst all the change and navel-gazing relating to fund stapling, marketing spending, mergers and acquisitions and the performance test, one wonders whether there is any room for genuine innovation in such an environment. Lest we not forget we are in the midst of a pandemic, markets are in a unique regime, and the focus on environmental and sustainability could accelerate quickly with a new US government and Democratic balance of power in the US Senate.
Areas that require nuanced policy discussions such as decisions relating to retirement income covenants and the role of guidance and advice, for instance, sadly have the potential to be swept up in populist debates in the absence of critical and unconflicted stewardship.
There has never been a more important time for industry to seek out what binds it rather than what divides through fact-based discussions and research which genuinely puts the consumer first.