Scale is not a big issue in the minds of Australian superannuation fund trustees, with most worried more about regulatory change and market volatility, according to new research released this week.
The research, conducted and released by the Sydney office of US-based Parametric Trustees, identified the issues of most concern to trustees as being regulatory change, inadequate post-retirement solutions for members and the negative impact of a sharp market fall on member balances.
Also worrying trustees were issues such their fund's operations and business, such as keeping technology current and finding and retaining talent, as well as hidden costs that erode returns including tax, foreign exchange, brokerage, and low interest on cash.
The survey sampled the views of trustees from APRA-regulated funds, with Parametric acknowledging most responses had come from funds with funds under management of between $5 billion and $10 billion, and mostly industry funds.
It noted that scale did not seem to be an issue in the minds of respondents, with most respondents ranking at the bottom end of their response.
Commenting on the results, Parametric Australasia chief executive, Chris Briant said he believed the key themes for super trustees this year would be dealing with an (ever) changing superannuation tax and regulatory landscape, developing ‘CIPR' post-retirement solutions for members, and employing investment approaches designed to immunise members against market volatility and falls.
"Operational strategy, tax management, and implementation efficiency are also likely to feature in funds' 2016 strategic agendas," he said.
There is a need for Australia’s superannuation funds to simplify their investment menus, according to the firm, given over a third of funds have more than 30 options, of which one or more are “arguably subscale”.
The research house is set to offer research ratings of superannuation funds for the first time amid growing demand from financial advisers.
Treasury is calling for submissions on its draft regulations in relation to the calculation of the proposed Division 296 tax.
Initially intended to offer a “simple, cost-effective” option for Aussies invested in default fund options, a super consultant has weighed in on what the scheme has actually done for members.
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