Five years ago I wrote an article for Investment Magazine about what the ideal super fund CEO might look like in a decade.

Now just past the half way mark let’s see how our super hero CEO is travelling.

Firstly, what is the industry’s shape beyond 2025?  After the ‘great super fund land grab’ of the early 20s, as foreshadowed in 2015, the endgame is “a modest number of mega industry funds, a few niche funds, even fewer corporate funds, some large retail funds, and SMSFs.” Funds will have net outflows as more retirees drawdown.

The perennial fund challenges remain – member engagement, fees, performance, cybersecurity, and the regulators’ insatiable appetite. Additionally, we see a positive laser focus on member benefits particularly retirement incomes. While, less helpfully, increasing noise from politicians and their proxies expressing preferences on Super’s purpose.

Our CEO will be: an accomplished leader across their diverse boards and teams; a keen strategist ensuring their fund’s competitiveness; a consummate communicator with all stakeholders; enterprise risk, tech and investment savvy; and, possess Job’s patience with regulators and commentators of all stripes. For all this they will enjoy likely half the pay of asset management CEOs. So, who wants this job?

Lets look at the 4 Cs – culture, complexity, competition, and clarity – that will shape our CEO.

Culture champion: Our CEO will be an accomplished people and business leader.  They will only succeed by building high functioning, collaborative, diverse teams in the future ‘distributed office’.  This will require all leadership adapting to new ways of working and reinforcing culture and purpose to access and retain limited top talent. CEO surveys show that culture is their highest priority and will be their legacy.

Complexity manager: The future super fund has an increasing range of more demanding stakeholders. In 2015, I wrote “future CEOs and boards will have to recognise their social contract” then came along the 2020 shock of the Early Release Scheme, which increased expectations of how Super should support society while wiping out accounts. Scalable advice and education will assist in future shocks.  The VUCA world often offers tough choices – no ERS and members suffer today, or offer ERS and members suffer tomorrow!

In 2015, we said, “as balances grow, member activists groups will lobby for changes”. In 2020 we saw members pressure funds to improve their ESG outcomes. ASX levels of disclosure will be normal.  Our CEO will be attune to community expectations – they will remember Juukan Gorge!

Competition ‘for member’ heart guiding a ‘for profit’ head: With fund ‘stapling’ regulations, some funds will benefit directly while all funds will be pushed into hyper-competition. Our CEO and their team must deliver net member growth. Younger, potential lifetime members will be highly prized arriving via digital channels. Meanwhile, our fiduciary leader must also balance the needs of their retirees decumulating assets.

In the mid 2020s, our CEO will be measured by a broad set of ‘net member benefits’. An independent expert authority will ensure all new regulations deliver member impact. Yes, a future where all legislation will need to have a detailed member impact test!

Furthermore, the mid 2020s, will see a mega-fund openly signal large fee reduction targets.  Finally, scale dividend and digitisation will deliver members benefits forcing more funds to exit. This signal may well come from well-funded entrants e.g. Vanguard.  We can expect to see more of this ‘burn the ships’ strategy – we arrived in our ships but are going home in yours.

Clarity: To maintain member relevance, our fund CEO and leadership team will need to ensure great clarity of purpose with their goals, behaviours and culture all well aligned. Mega funds will need to differentiate or risk becoming another wealth manager giant.

As super moves towards $4 trillion becoming the leading capital source driving economic transformation such as decarbonisation and digitisation, our CEO will be in the national economic and societal conversations. They will have ‘crossed the Rubicon’ from fund operations and risk managers to financing titans of the 21st century.  A regular clarity compass check will be vital to future success.