Super funds should worry more about reputation: Parametric
Super funds regulated by the Australian Prudential Regulation Authority (APRA) are not getting through to stakeholders and are too comfortable and defensive of the status quo, according to Parametric.
In a research paper presented yesterday at the Australian Super Investment 2017 Conference, Parametric said APRA-regulated funds had fallen into five “status quo thinking traps” and needed to avoid defending the system.
The advisory said funds had failed to communicate effectively with members, commentators, regulators and the Government, and remained cautious about seeking new opportunities which contributed to an overall negative view of the industry.
Commenting on the research, Parametric managing director, Raewyn Williams said super funds had to be aware of the negative “perception problem” being created.
“The perception that we are too focused on the status quo could be damaging confidence in the industry,” she said.
“As an industry, we have been responding to these stakeholder criticisms by ‘picking off’ the issues one by one, but our research suggests there is also power in a more collective response – super funds building up a demonstrable record of thought leadership and innovation.”
Parametric’s five traps for super funds to avoid are:
- Status quo roles, responsibilities and resourcing;
- A risk averse or blame culture;
- Super fund size and scale, which makes it hard to divert thinking and resources from a super fund's existing work; and
- Potential groupthink across the industry
- Functional silos;
“If super funds are able to demonstrate that they are focused on opportunities to evolve and "future-proof" their offering, rather than preserve existing arrangement, they are treating opportunities with the urgency they deserve,” Williams said.
“This will go some way towards silencing the critics in one broad brushstroke.”
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