Darcy Song

As UK pension reform picks up steam, British policymakers and funds have embarked on fact-finding missions to understand the inner workings of their Australian counterparts. Of particular focus has been what has – and hasn't worked – like performance testing, stapling and the conflict between costs and member outcomes.

As one of the rare public-offer industry super funds with a considerable defined benefit component, Aware Super is keen to apply its investment and liabilities management skills to defined contribution assets in a post-Retirement Income Covenant world. Portfolio manager of retirement strategy Shang Wu unpacks the fund’s DB position.

Mega fund AustralianSuper said it is still feeling the pain from its very public loss in US software company Pluralsight and even with $341 billion assets under management, a $1.1 billion write-down is still too big a chunk of money to let go easily.

Linda Scott, chair of $53 billion fund CareSuper, has questioned whether the Your Future Your Super performance test is driving good outcomes for the superannuation system and advocated for the role of smaller funds. Her comments came after CareSuper and Spirit Super completed its so-called “merger of equals”, instead of chasing scale with larger peers.

Asset owners and managers may be constantly bickering about fees, but one thing both parties are thinking a lot more about these days is creating innovative structures which – if done right – could provide rewards for the former and value for the latter.

Allocating capital to net zero opportunities doesn’t mean investors are prepared to do charity. In a universe of potential transition solutions, Battcock Professor of Environmental Economics Cameron Hepburn at the Smith School of Enterprise and the Environment, University of Oxford said investors should look at them with some filters.

The Albanese government has finally legislated an objective for the super system, in an eleventh-hour achievement that makes Australia the second developed nation to do so. The milestone comes almost two years after Treasurer Jim Chalmers kicked off the campaign at a Conexus Financial Political Series event.

Licensees will be free to employ a new class of diploma-educated financial advisers and charge for their services in a last-ditch effort by Minister for Financial Services Stephen Jones to legislate advice reform before the election. However, the concessions come with the catch that advice provided by the new class will be limited to APRA-regulated products and subject to new civil penalties.

The Labor government will pursue legislation to allow super funds to “nudge” their members to seek financial advice, as part of their efforts to fulfill their Retirement Income Covenant obligations. Minister for Financial Services Stephen Jones claimed he had achieved “consensus” following a confidential and heated consultation over the introduction of a new class of financial adviser.

AI can add value in almost every part of the investment process, including manager selection and monitoring and risk management, providing support in information gathering and analysis, sometimes from non-traditional and hard-to-access data sources, according to a new CFA Institute Research and Policy Center report.