Restoring confidence in super key challenge for industry

Chief executives operating in the Australian financial services industry believe more has to be done to restore confidence in the superannuation system, according to a new study conducted by PriceWaterhouseCoopers.

The study, the findings of which were released at this week’s Investments and Financial Services Association Conference on the Gold Coast, found restoring confidence in superannuation was the most important challenge facing the industry.

The Wealth Management Chief Executive Officer Survey suggested that until the recent market turmoil there appeared to be widespread confidence, “albeit with low levels of understanding and engagement in superannuation as a framework within which retirement savings are built, managed and eventually drawn down".

It said with many superannuation balances now diminished, confidence had been challenged.

In a panel discussion based on the PriceWaterhouseCoopers findings, the chief executive of Suncorp Wealth Management, Geoff Summerhayes, said he believed the industry needed to do a better job of managing and explaining risk for superannuation fund members in circumstances where the industry appeared to be “obsessed with alpha” when clients were really concerned about risk and beta.

Summerhayes said it was in these circumstances that the most important thing an adviser could do was determine what a client really wanted to achieve.

The chief executive of Colonial First State, Brian Bissaker, said there was a need for the industry to ensure that clients made more informed choices and understood what was behind the performance of superannuation funds at particular times.

“There are often good reasons why funds perform in particular ways and consumers need to understand what is occurring,” he said.