Giving the members what they want – why it’s not always a good thing

Share on facebook
Share on twitter
Share on linkedin
Share on email

The introduction of member investment choice within a fund and compulsory choice of fund for most employees split the Australian superannuation industry during the late 1990s. The arguments on both sides were both practical and philosophical. What’s happening now, though, may have far greater consequences for aggregate retirement incomes and yet is attracting little debate.

It’s early days but if you speak with the providers of new-style wholesale member-directed platforms, requests for information and follow-up meetings with big super funds are gathering pace. The bellwether fund AustralianSuper disclosed it was working on its new member-directed platform in late 2011. The big funds which have followed, such as corporate Telstra Super and sector industry funds HostPlus and CARE, are in varying stages of introducing different types of offerings. Others, including administrator AAS and multi-manager Mercer, have been reported as also keen on the idea.

The big differences between these platforms and the old member investment choice options is that they provide far greater control in the hands of the member and allow the member to access better – that is, retail – cash and term deposit rates with the banks.

And here is the nub of the problem for the country as a whole. Left to their own devices, most members would prefer to invest in things they understand. That would normally be a commendable approach for professional investors too. But, at least in the current environment, the indications are they will put more than half their assets into cash and term deposits. They will hold a handful, non-diversified, bunch of blue-chip Australian stocks, an ETF or two to access the broader market and perhaps international, and some property. They will not hold much in traditional balanced or sector-specific managed funds.

This is the recent experience of separate SMSFs, which are our only guide at this stage of the roll-out of member-directed platforms.

The opposing practical arguments are: the resultant asset allocation is likely to be sub-optimal over the long term, on the one hand, but, on the other, it’s their money and therefore their risk. The philosophical arguments overlap: what is the responsibility of the trustees of a big fund and who should regulate the member-directed components? On the other hand, the member knows better than anyone what his or her whole financial position is and, to put it bluntly, it seems like the professionals haven’t done such a great job in recent years.

Then there are issues of trust. According to Australian Bureau of Statistics figures, the total non-super money in managed funds peaked at about $700 billion in 2007 and has fallen to $550 billion subsequently.  Slightly more than half of the fall – $80 billion – was from managed funds and the rest from cash management trusts, life offices and others. The freezing of some funds during 2008 and some well-publicised collapses have not helped the cause for retail managed funds.

The SMSF association, SPAA, and research work by platform provider SuperIQ, point to control being the key to the decision by members to manage their own money. And this is really about trust.

It will be interesting to see whether the introduction of MySuper so-called “low cost” default options remedy the trust problem. My guess is it won’t.

What the Government should have done following its various reviews of the past three years, is introduce a minimum balance of, say, $500,000, before members are allowed to manage their own super investments. The industry, especially AIST, should have lobbied for this.

If the trend continues it is likely that tax payers will have to foot a bigger bill for old-age pensions over the next generation of retirees.

Meantime, the business folk running fund management firms, well aware of the SMSF trend and probably starting to be aware of the member-directed trend inside big funds, are looking to adapt their offerings.

Russell Investments, for instance, announced a couple of weeks ago the first of a number of planned partnerships with dealer groups whereby it assists in the provision of “outcome-orientated” strategies. These are strategies which are a bit like the old balanced funds but without the same benchmark awaredness and more of what the customer wants.

One thing consumers want is to avoid what academics call “sequencing risk”, which is where markets may go down for an extended period at a really bad time, such as just before retirement. There’s an interesting article about it, written by Kevin O’Sullivan of Russell on last week’s newsletter from Chris Cuffe and friends:

http://cuffelinks.com.au/superannuation/sequencing-risk-and-ways-to-manage-it

 

 

Share on facebook
Share on twitter
Share on linkedin
Share on email
bintangseo.com viralisme.web.id/ https://sfvipplayer.com/ https://paficengkarengtimur.org/ https://www.rebounderz.com/pkv/cahayapoker/ https://www.rebounderz.com/pkv/cahayaqq/ https://www.rebounderz.com/pkv/jawadomino/ https://www.rebounderz.com/pkv/pkvgames/ https://www.rebounderz.com/pkv/bandarqq/ https://www.rebounderz.com/pkv/dominoqq/ https://thebusinessblocks.com/pkv/cahayapoker/ https://thebusinessblocks.com/pkv/cahayaqq/ https://thebusinessblocks.com/pkv/jawadomino/ https://thebusinessblocks.com/pkv/pkvgames/ https://thebusinessblocks.com/pkv/bandarqq/ https://thebusinessblocks.com/pkv/dominoqq/ https://thomknoles.com/pkv/cahayapoker/ https://thomknoles.com/pkv/cahayaqq/ https://thomknoles.com/pkv/jawadomino/ https://thomknoles.com/pkv/pkvgames/ https://thomknoles.com/pkv/bandarqq/ https://thomknoles.com/pkv/dominoqq/ https://min8.kemenagngawi.or.id/pkv/cahayapoker/ https://min8.kemenagngawi.or.id/pkv/cahayaqq/ https://min8.kemenagngawi.or.id/pkv/jawadomino/ https://min8.kemenagngawi.or.id/pkv/pkvgames/ https://min8.kemenagngawi.or.id/pkv/bandarqq/ https://min8.kemenagngawi.or.id/pkv/dominoqq/ https://smartours.com/pkv/cahayapoker/ https://smartours.com/pkv/cahayaqq/ https://smartours.com/pkv/jawadomino/ https://smartours.com/pkv/pkvgames/ https://smartours.com/pkv/bandarqq/ https://smartours.com/pkv/dominoqq/ https://naeba.org/pkv/cahayapoker/ https://naeba.org/pkv/cahayaqq/ https://naeba.org/pkv/jawadomino/ https://naeba.org/pkv/pkvgames/ https://naeba.org/pkv/bandarqq/ https://naeba.org/pkv/dominoqq/ https://min11.kemenagngawi.or.id/pkv/cahayapoker/ https://min11.kemenagngawi.or.id/pkv/cahayaqq/ https://min11.kemenagngawi.or.id/pkv/jawadomino/ https://min11.kemenagngawi.or.id/pkv/pkvgames/ https://min11.kemenagngawi.or.id/pkv/bandarqq/ https://min11.kemenagngawi.or.id/pkv/dominoqq/ https://automotivemuseumguide.com/pkv/cahayapoker/ https://automotivemuseumguide.com/pkv/cahayaqq/ https://automotivemuseumguide.com/pkv/jawadomino/ https://automotivemuseumguide.com/pkv/pkvgames/ https://automotivemuseumguide.com/pkv/bandarqq/ https://automotivemuseumguide.com/pkv/dominoqq/ https://www.newyorkfacialplasticsurgery.com/pkv/cahayapoker/ https://www.newyorkfacialplasticsurgery.com/pkv/cahayaqq/ https://www.newyorkfacialplasticsurgery.com/pkv/jawadomino/ https://www.newyorkfacialplasticsurgery.com/pkv/pkvgames/ https://www.newyorkfacialplasticsurgery.com/pkv/bandarqq/ https://www.newyorkfacialplasticsurgery.com/pkv/dominoqq/ https://rosewellness.com/pkv/cahayapoker/ https://rosewellness.com/pkv/cahayaqq/ https://rosewellness.com/pkv/jawadomino/ https://rosewellness.com/pkv/pkvgames/ https://rosewellness.com/pkv/bandarqq/ https://rosewellness.com/pkv/dominoqq/ https://www.dubber.net/pkv/cahayapoker/ https://www.dubber.net/pkv/cahayaqq/ https://www.dubber.net/pkv/jawadomino/ https://www.dubber.net/pkv/pkv-games/ https://www.dubber.net/pkv/bandarqq/ https://www.dubber.net/pkv/dominoqq/ https://mmchospital.org.pk/pkv/cahayapoker/ https://mmchospital.org.pk/pkv/cahayaqq/ https://mmchospital.org.pk/pkv/jawadomino/ https://mmchospital.org.pk/pkv/pkv-games/ https://mmchospital.org.pk/pkv/bandarqq/ https://mmchospital.org.pk/pkv/dominoqq/ https://brittanyhodak.com/pkv/cahayapoker/ https://brittanyhodak.com/pkv/cahayaqq/ https://brittanyhodak.com/pkv/jawadomino/ https://brittanyhodak.com/pkv/pkv-games/ https://brittanyhodak.com/pkv/bandarqq/ https://brittanyhodak.com/pkv/dominoqq/ https://mantonpushrods.com/pkv/cahayapoker/ https://mantonpushrods.com/pkv/cahayaqq/ https://mantonpushrods.com/pkv/jawadomino/ https://mantonpushrods.com/pkv/pkv-games/ https://mantonpushrods.com/pkv/bandarqq/ https://mantonpushrods.com/pkv/dominoqq/ https://justicesupportcentre.org.au/pkv/cahayapoker/ https://justicesupportcentre.org.au/pkv/cahayaqq/ https://justicesupportcentre.org.au/pkv/jawadomino/ https://justicesupportcentre.org.au/pkv/pkv-games/ https://justicesupportcentre.org.au/pkv/bandarqq/ https://justicesupportcentre.org.au/pkv/dominoqq/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/pkv/cahayapoker/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/pkv/cahayaqq/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/pkv/jawadomino/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/pkv/pkv-games/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/pkv/bandarqq/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/pkv/dominoqq/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/-/cahayapoker/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/-/cahayaqq/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/-/jawadomino/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/-/pkv-games/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/-/bandarqq/ https://jupiter.csit.rmit.edu.au/~e46970/ICEcoder/-/dominoqq/ https://www.thehumanelement.com/pkv/cahayapoker/ https://www.thehumanelement.com/pkv/cahayaqq/ https://www.thehumanelement.com/pkv/jawadomino/ https://www.thehumanelement.com/pkv/pkv-games/ https://www.thehumanelement.com/pkv/bandarqq/ https://www.thehumanelement.com/pkv/dominoqq/ https://www.jjlawchambers.com/pkv/cahayapoker/ https://www.jjlawchambers.com/pkv/cahayaqq/ https://www.jjlawchambers.com/pkv/jawadomino/ https://www.jjlawchambers.com/pkv/pkv-games/ https://www.jjlawchambers.com/pkv/bandarqq/ https://www.jjlawchambers.com/pkv/dominoqq/ https://www.jjlawchambers.com/pkvgame/cahayapoker/ https://www.jjlawchambers.com/pkvgame/cahayaqq/ https://www.jjlawchambers.com/pkvgame/jawadomino/ https://www.jjlawchambers.com/pkvgame/pkv-games/ https://www.jjlawchambers.com/pkvgame/bandarqq/ https://www.jjlawchambers.com/pkvgame/dominoqq/ https://emvision.com.au/pkv/cahayapoker/ https://emvision.com.au/pkv/cahayaqq/ https://emvision.com.au/pkv/jawadomino/ https://emvision.com.au/pkv/pkv-games/ https://emvision.com.au/pkv/bandarqq/ https://emvision.com.au/pkv/dominoqq/ https://insideadviser.com.au/pkv/cahayapoker/ https://insideadviser.com.au/pkv/cahayaqq/ https://insideadviser.com.au/pkv/jawadomino/ https://insideadviser.com.au/pkv/pkv-games/ https://insideadviser.com.au/pkv/bandarqq/ https://insideadviser.com.au/pkv/dominoqq/ https://htgroup.edu.vn/pkv/pkv/cahayapoker/ https://htgroup.edu.vn/pkv/pkv/cahayaqq/ https://htgroup.edu.vn/pkv/pkv/jawadomino/ https://htgroup.edu.vn/pkv/pkv/pkv-games/ https://htgroup.edu.vn/pkv/pkv/bandarqq/ https://htgroup.edu.vn/pkv/pkv/dominoqq/ https://online.tasmanenvironmental.com.au/pkv/cahayapoker/ https://online.tasmanenvironmental.com.au/pkv/cahayaqq/ https://online.tasmanenvironmental.com.au/pkv/jawadomino/ https://online.tasmanenvironmental.com.au/pkv/pkv-games/ https://online.tasmanenvironmental.com.au/pkv/bandarqq/ https://online.tasmanenvironmental.com.au/pkv/dominoqq/ https://www.newkutagolf.co.id/uploads/pkv/cahayapoker/ https://www.newkutagolf.co.id/uploads/pkv/cahayaqq/ https://www.newkutagolf.co.id/uploads/pkv/jawadomino/ https://www.newkutagolf.co.id/uploads/pkv/pkvgames/ https://www.newkutagolf.co.id/uploads/pkv/bandarqq/ https://www.newkutagolf.co.id/uploads/pkv/dominoqq/ https://www.thegoldentimes.com.au/pkv/cahayapoker/ https://www.thegoldentimes.com.au/pkv/cahayaqq/ https://www.thegoldentimes.com.au/pkv/jawadomino/ https://www.thegoldentimes.com.au/pkv/pkv-games/ https://www.thegoldentimes.com.au/pkv/bandarqq/ https://www.thegoldentimes.com.au/pkv/dominoqq/ https://campfire.com.au/pkv/cahayapoker/ https://campfire.com.au/pkv/cahayaqq/ https://campfire.com.au/pkv/jawadomino/ https://campfire.com.au/pkv/pkvgames/ https://campfire.com.au/pkv/bandarqq/ https://campfire.com.au/pkv/dominoqq/ https://www.kplfiltration.com.au/pkv/cahayapoker/ https://www.kplfiltration.com.au/pkv/cahayaqq/ https://www.kplfiltration.com.au/pkv/jawadomino/ https://www.kplfiltration.com.au/pkv/pkvgames/ https://www.kplfiltration.com.au/pkv/bandarqq/ https://www.kplfiltration.com.au/pkv/dominoqq/ https://roxtonindustries.ca/pkv/cahayapoker/ https://roxtonindustries.ca/pkv/cahayaqq/ https://roxtonindustries.ca/pkv/jawadomino/ https://roxtonindustries.ca/pkv/pkvgames/ https://roxtonindustries.ca/pkv/bandarqq/ https://roxtonindustries.ca/pkv/dominoqq/ https://app.kelaskedokteran.com/public/pkv/cahayapoker/ https://app.kelaskedokteran.com/public/pkv/cahayaqq/ https://app.kelaskedokteran.com/public/pkv/jawadomino/ https://app.kelaskedokteran.com/public/pkv/pkvgames/ https://app.kelaskedokteran.com/public/pkv/bandarqq/ https://app.kelaskedokteran.com/public/pkv/dominoqq/ https://cruisepassenger.com.au/pkv/cahayapoker/ https://cruisepassenger.com.au/pkv/cahayaqq/ https://cruisepassenger.com.au/pkv/jawadomino/ https://cruisepassenger.com.au/pkv/pkvgames/ https://cruisepassenger.com.au/pkv/bandarqq/ https://cruisepassenger.com.au/pkv/dominoqq/ https://jasonhunterdesign.com/pkv/cahayapoker/ https://jasonhunterdesign.com/pkv/cahayaqq/ https://jasonhunterdesign.com/pkv/jawadomino/ https://jasonhunterdesign.com/pkv/pkvgames/ https://jasonhunterdesign.com/pkv/bandarqq/ https://jasonhunterdesign.com/pkv/dominoqq/ https://canopyblue.co/pkv/cahayapoker/ https://canopyblue.co/pkv/cahayaqq/ https://canopyblue.co/pkv/jawadomino/ bandarqq dominoqq domino99 qiuqiu pkv games aduq sakong bandarqq dominoqq domino99 qiuqiu pkv games aduq sakong bandarqq dominoqq domino99 pkv games qiuqiu