The Australian superannuation industry is failing to achieve optimal performance in part due to its continued focus on self-interest, warns AustralianSuper chief executive Ian Silk.
Speaking at the 2015 ASFA Conference in Brisbane yesterday, Mr Silk said that while the industry is performing adequately – it is still a long way from optimal performance.
“The superannuation industry is doing a good job but that’s not the question. The questions for this industry – in the context of those special responsibilities and special obligations – is are we doing the optimal job? Are we performing optimally or are we just performing well?”
Mr Silk argued that the industry is stuck performing in line with the latter and needs to strive towards a “grand ambition” if it is to outperform. He said that this ambition should be defined as an industry that does all in its power to help Australians achieve an adequate retirement income.
According to Mr Silk, an area which is currently prohibiting the industry from achieving its grand ambition, and therefore operating optimally, is the issue of fees and self-interest.
He said fees need to be discussed in the context of member best interests, not corporate metrics.
“If regulators and governments don’t impose a system on the industry that encourages much greater automaticity of account consolidation, what is to stop us coming together as an industry to provide a better system for members?”
“There’s only one thing stopping us. Self-interest. Interests of the agents of the industry,” he said.
Mr Silk said the industry needs to stop diverting from its sole purpose – acting in the best interests of members.
“We should have at the epicentre of this system the guiding principle of acting in the best interests of members and not diluting a singular focus [from] that objective.”
ASFA independent chair Michael Easson also indicated the importance of embracing change.
“We navigate a policy ocean brimming with challenges and opportunity presented by issues such as post retirement, system objective, efficiency and competitiveness and tax reform,” said Mr Easson.
“We should never, however, be afraid of change. Our industry is dynamic; we want to be at the forefront of making a good system better.”
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