Developing post-retirement solutions is not a matter of finding the best investment product, but identifying a product that is most likely to lead to the retention of pensioners by the fund, according to JANA head of investment outcomes Ken Marshman.
"We can all design something that is optimal, but the member might not want it - that is really what the game is," Marshman said at the annual Fund Executives Association conference last week.
"We haven't spent enough time to see what our competitive advantages are relative to any other fund and any other provider of this service.
"This is a business game; this is not an actuarial perfect game."
He said superannuation funds were given members' money by virtue of the superannuation guarantee, rather than by an active choice of members.
But once members reach retirement and are able to withdraw the money, funds will need to take more notice of the wishes of these members.
"In post-retirement this is their money; they can keep it, they can spend it, they can put it somewhere else. You are competing against a whole range of providers," Marshman said.
"How do you want to position yourself against your competitors? This is a business and marketing game and [it is about] knowing and building those links with your members."
But Lazard Asset Management head of Australia Rob Prugue said funds should focus on what members needed, not what they wanted.
"Members want returns that are top quartile in the bull market and returns that beat cash in the bear market," Prugue said.
"I've never seen the pendulum swing halfway, so let's put what members want aside for the moment and look at the needs."
He said the asset management industry was held hostage by league tables, which created rigid asset allocation structures to the detriment of investors.
"We actually used to do a really good job managing pension funds 20 years ago," he said.
"Asset allocation did shift. I remember when I was at AMP; we moved asset allocation. If an asset was deemed expensive, guess what? We got out.
"But then all of a sudden we employed the 70/30 rule, a number we must stick by, maybe because the agents and the league tables said: 'You're not deemed balanced, unless you've got that allocation. If you go 60/40 or 50/50, we've got to change you in the league table.' Maybe that has held us back."
