Shorten’s 'fresh set of eyes' welcomed

Having Bill Shorten come in and look over the industry with a fresh set of eyes cannot be a bad thing, according to Schroder Investment Management chief executive Greg Cooper.

“He’s clearly got some connections into that part of the superannuation fund universe [through working at AustralianSuper, which] is a good thing because he’s going to get pretty informed comments from those people around him and he’s in a position where he understands all that,” Cooper said.

A proposed increase in the superannuation guarantee to 12 per cent needs to be accelerated, and then an increase to 15 per cent or even 18 per cent needs to be considered, while SuperStream needs to be implemented sooner rather than later, Cooper said.

Cooper said a fresh approach would be of particular benefit around Jeremy Cooper’s MySuper proposal, particularly given that “two parts of the industry that have traditionally been at loggerheads over all sorts of issues are both standing up saying ‘that ain’t gonna solve the problem; it’s not going to make things cheaper; it’s going to make them more expensive'.”

Funds management fees may be a little high but there are better ways to reduce them, Cooper said.

“The big arbitrages in funds management are really scale, complexity and time horizon,” he said.

Scale is something the industry is not necessarily playing to its benefit. More managers is not necessarily a good thing because, quite simply, as size goes up costs go down, Cooper said.

Cooper was also dismissive of the co-called ‘alternative’ asset classes, which he said were a good way to generate extra fees, but if a manager could get similar returns from bonds at a lower cost and lower risk compared to infrastructure, they were obliged to do that for their clients.