With almost six years on the clock as chief executive of the SMSF Association, the 2023 National Conference marks John Maroney’s last as the association’s leader before he hands over to current deputy CEO Peter Burgess.
The association has faced multiple challenges during Maroney’s tenure, ranging from fending off unwelcome superannuation policy proposals to keeping a 3000-strong membership engaged and educated during a global pandemic.
Through it all, Maroney has led the association with a clear sense of purpose and as a strong advocate and thoughtful commentator on all issues relating to superannuation generally and self-managed super funds in particular. Maroney says the engagement of SMSF members with superannuation, and the sector’s capacity to innovate, are two characteristics that make it a particularly rewarding area to have been involved in.
“No one’s in the sector that didn’t actively decide they’re going to go and do that,” he told Professional Planner, relaxed while enjoying his final national conference.
“They might have had some encouragement, some promotion. But in the end, they said, Yep, I’m going to go and take control, I’m going to go and put my money in there. And I’m going to try to build a better more dignified retirement by actively participating either myself or [with] professional advisers.”
While some of the complexity of the superannuation system affects funds of all kinds, SMSFs have their own peculiar complexity, in part because each is tailored to the needs of a small, distinctive group of members (sometimes just one member), and because they are often advised by highly technically competent, creative and innovative professionals.
Maroney said SMSF innovation interests him because he has a fund of his own – in addition to an account with an industry fund – which he established on his return to Australia from Switzerland. He said he told his accountant his rationale for setting up an SMSF was “so I can stand up on the platform, talking to my 3000 members, and confidently feel that I’m part of the sector, and that I understand that because I’m actually out there doing it myself”.
“He said, ‘well, that’s strange. I’ve never had that as a goal before’,” Maroney said.
“It’s been great. It really has got me much more engaged with the issues the sector is dealing with. And it’s opened my eyes. I haven’t done anything too exotic. I’ve done a mixture of investment things. We’re just going through estate planning at the moment.”
The defining characteristics of SMSFs, and the fact that the sector is jointly regulated by the ATO and ASIC, means it is sometimes thought of as separate from the APRA-regulated section of the industry, although with 1.1 million members and asset of around $860 billion, SMSFs are clearly far from insignificant. But as the superannuation industry grapples with the wording of a proposed legislated objective for super, SMSFs are very much in the big picture and central to the discussion.
Maroney said he doubts that superannuation will ever be completely removed from the political cycle, even if the debate reaches a point where there’s an agreed and legislated objective.
“But I think it should reduce the opportunity for left field ideas to come in unless they fit within the objective,” he said.
He adds that the broad concepts included in the government’s draft objectives statement have long been supported by the SMSF sector.
“We’ve supported that for many years a ‘dignified’ retirement, we’ve supported ‘equitable’ and ‘sustainable’,” he said.
“Yes, there’ll be debates about what that means and how you would deal with it. Preservation is another one: we do support preservation.
“Just having it legislated doesn’t mean a future government can’t do something that’s inconsistent, or change it, but I think there’d be a lot of inertia. Once you go through a big debate, which we will, up until this is dealt with, next time it comes around there’ll be a lot of inertia within the parliament saying no, we are not going to debate this every three or five years, that was settled.”
Maroney says a settled objective should lead to a more settled sector, and more settled sector will encourage more people to make voluntary contributions.
“That’s another issue that sets our sector aside from large funds,” he said.
“Proportion-wise there’s large amounts of voluntary contributions in our sector, compared to the rest of the system.”
One achievement Maroney is particularly proud of is the role the SMSF sector played in overturning a proposed policy to abolish excess franking credits, which would have hit his SMSFs far harder than it hit larger funds.
“If you if you add it up and put a number next to in terms of what would have been the financial impact on the sector, if that had gone through, it’s probably $18 billion to $20 billion over a three- or six-year period, depending how you measure that,” Maroney said.
Having worked overseas for a good part of his career, Maroney said it’s not a uniquely Australian trait to be focused on the parts that don’t work of a system that is on most objective measures a world-leading retirement system, although “we perhaps do it a little bit more”.
“It’s a combination of the media cycles, the political cycles,” he added.
“[The way] our political system is designed, you have a government, you have an opposition, the opposition’s job is to oppose. And so yes, there’s always lively debate when something comes up. There’s always different angles on it.
“But I think both sides have actually contributed to the system. It’s better now than it was 30 years ago, hopefully will continue to get better with the things that are [currently] being looked at.”
The national conference in Melbourne was attended by financial services minister Stephen Jones. Maroney took the opportunity to showcase to Jones the degree of innovation taking place within the sector.
“Just to take the minister around the expo hall and show him all the innovation, to introduce him to some of our partners there that are just doing a terrific job in that innovation that I mentioned, has been fantastic,” Maroney said.
“We’ve opened his eyes this morning, saying ‘Look at all this innovation is going on’. A lot of the APRA sector innovation actually follows [SMSF innovation].
“It’s easier to innovate with small things where you don’t have legacy systems. You don’t have to think, ‘How are two million people going to react to this?’ We can try it. One provider might try it with 5000 people – [if] that works it’s something then spreads to 5000, 15,000, 50,000, 600,000 [members], and then the large funds [think] ‘Oh, can we offer more choice here?’, or ‘can we offer more engagement there and try a platform that’s going to help?’.”
Maroney says he’s confident he leaves the SMSF Association in good shape after emerging from the Covid-19 pandemic – which affected the association directly, as it affected all employers, and restricted its ability to run face-to-face events, an important source of revenue – and despite regulation leading to a decline in financial adviser numbers and the withdrawal of many accountants from the advice space.
“We’ve managed to keep the ship on a steady keel despite rough waters from Covid,” Maroney said.
He added that during his time at the helm, he’s sought to foster collaboration with other industry associations and representatives to help further the SMSF cause, which included during the Quality of Advice Review.
“We formed an alliance for a fairer retirement with 12 other organisations that had a lot of overlapping interests,” he says.
“We showed [government] that if a genuine threat comes, the sector can get together.
“We’ve collaborated since then, most recently, on the Joint Associations Working Wroup, again another 12 or 13 associations trying to get a unified voice.
“I was at the center of both of those. I don’t think either wouldn’t happen without me. Now, I couldn’t do it alone, but someone had to get the ball rolling, if this is a big issue that affects a number of us.
“I think we’ve got collaboration with other associations, both political parties, we’ve talked to as much of the media as we can. We try to be friends with everyone, not that being friendly is an end in itself. But that helps communicate and I think it helps get support, when there are issues of common interest coming up here. You don’t want to go and ask for someone to be an ally, if you’ve not talked to them before something comes along.”
Maroney also nominated landmark SMSF research conducted with Rice Warner and with the University of Adelaide as key achievements by the association, as well as building a strong relationship with regulators.
“We’ve had a really strong partnership with [the ATO],” he said.
“And we’ve both got the same goal in mind: we want the sector to be healthy, to have high integrity, we don’t want people in there that shouldn’t be there.
“We’ve worked hard with ASIC, we’re really pleased that ASIC changed its guidance on SMSF advice and establishments in December, but that was the end of a two-year issue, and research and advocacy with them.
“We did try as hard as we could to embrace directly with SMSF trustees, through expos and things. Covid really has stopped that going forward in a substantial way.
“But at the moment, we just need to keep that a little bit quieter, because we need to make sure that the mothership is running as smooth as you can, but [it would] be great to return to that in two- or three-years’ time, once there’s a greater capacity to do more.”
