Proxy advice changes could increase member costs

The Government’s consultation on proxy advice could lead to an increased cost for superannuation fund members as the process will have to be done internally, according to a panel. 

At a roundtable at the Australian Council of Superannuation Investors (ACSI) conference, Damien Graham, Aware Super chief investment officer (CIO), said: “The point we made towards the Government’s proposed approach is just the likely increased cost if we were having to do this process all internally by funds, it would just have a very material increase to the cost of voting”. 

“We need to do that because our members expect us to be good custodians of their money, so we can’t avoid voting, but to do it all ourselves would be incredibly expensive.” 

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Julie Lander, CareSuper chief executive, said proxy advisers were one source of information but an important one that was valued. 

“We believe in active management and absolutely insist our managers engage with companies as well,” Lander said. 

“We will see what proxy advisers are saying and what the managers are saying, and if there’s a disconnect that’s when we’ll look into a particular issue. 

“It’s not a tick-a-box system and we don’t just get a list from proxy advisers and vote that way, there’s a lot more thought put into it. 

“It’s far more efficient to use proxy firms – it’s efficient for the companies and it’s efficient for the funds.” 

Graham said they did go against the advice of proxy advisers on occasion, but it was not a high proportion of the total votes. 

“To Julie’s point, we take that as one input, we do the analysis ourselves internally… it’s part of the decision making,” Graham said. 

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