Why are fund managers reluctant to discuss Voice referendum?

With 10 days to go until a referendum on whether to enshrine an Indigenous Voice to Parliament in the constitution, growing public sentiment has seen Australia’s corporate world venture into the conversation; however, many fund managers are reluctant to reveal a stance.

This is in sharp contrast to the superannuation sector, which has seen a number of industry funds speak up in support of the Voice.

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Two of the country’s largest super funds, $300 billion AustralianSuper and $260 billion AustralianRetirement Trust, have both heralded the Voice as an important step towards reconciliation.

Other advocates include UniSuper, HESTA, Rest, Aware, CareSuper, and industry bodies like Industry Super Australia and Women in Super.

“When AustralianSuper became a signatory to the Uluru Statement of the Heart in 2017, we did so to show our commitment to helping First Nations members to achieve a better financial position in retirement,” Australia’s largest super fund, which has over 3.2 million members, stated.

“That’s why we support the Voice – because we believe it will help deliver better retirement outcomes for members and is an important step towards truth-telling and Treaty.”

However, vocal supporters have been harder to find heading into the funds management side of financial services.

A number of prominent funds in Australia, including Fidelity International, Janus Henderson, Maple-Brown Abbott, Nanuk Asset Management and Schroders, declined to comment on the Voice when contacted by Money Management.

All five have been identified as responsible investment (RI) leaders by the Responsible Investment Association Australasia (RIAA) in its 2023 Responsible Investment Benchmark Report. 

Simon O’Connor, chief executive at RIAA, explained these leaders comprise a diverse group of domestic and international fund managers that are assessed as able to demonstrate leading practices and approaches to RI across their organisation.

“The group of 54 RI leaders this year represent fund managers operating in our market, and many of these are international fund managers who are domiciled in other countries. Approximately half are international managers. 

“For internationally based managers, it’s likely to be seen by them to not be appropriate to comment on domestic referendums,” he told Money Management.

Closer to home, he noted many domestic fund managers have made public commitments of support or are encouraging their own employees and clients to inform themselves on the Voice, including First Sentier Investors (FSI) and Australian Ethical.

Reflecting on this “important constitutional amendment”, FSI said it recognises it has an active role in supporting reconciliation: “We support a First Nations Voice to Parliament and believe that a successful ‘Yes’ vote is a welcome step forward on the road to reconciliation and to building a more equitable and fair Australia in partnership with First Nations peoples.”

Similarly, Australian Ethical Investment, an ethical investor since 1986, has backed the cause as a decision to enable First Nations peoples to “have a say in policy and legal decisions that impact their lives.”

While Vanguard stopped short of an official statement, a spokesperson told Money Management: “We have not taken a public stance, however, as we approach this important decision, we are focused on providing educational opportunities for our team through our Reconciliation Action Plan (RAP) working group to gain an informed view.”

Martin Currie told the publication it has implemented a “strong policy of engagement”.

In its recent analysis of the ASX reporting season, it noted: “We acknowledge that many Australian companies have operations that impact First Nations people and their lands. Often, these outcomes are also at odds with the community’s cultural values, specifically the community’s intent to ensure the use of their land minimises any detrimental impact on their cultural and traditional connections to that land.”

Perpetual, in outlining its community commitments to First Nations peoples on its website, said it supports the Uluru Statement from the Heart and the establishment of a First Nations Voice enshrined in the Constitution.

Unpacking the reluctance

RIAA’s O’Connor noted that, while the organisation has not assessed the number who have publicly supported the Voice, in many cases those who have been able to speak out publicly in support are those who have established programs of work to progress their own reconciliation journeys through Reconciliation Action Plans (RAPs).

For example, Martin Currie said it began work this year to record the status and effectiveness of RAPs of the companies it invests in and committed to engage with them to build awareness.

“We have worked with our members to promote the uptake of RAPs as a framework for building an organisational commitment to supporting First Nations people and reconciliation,” he said.

“What we do know, however, is there are still many financial services organisations who don’t have in place RAPs, and often this is the first step to being a stronger advocate for supporting First Nations people’s rights to self-determination.”

He added that many of these leaders work across a broad variety of clients and could have determined it is the role of their clients, as opposed to their own role, to take a strong stand in support of the Voice to Parliament.

“What is clear is that many individuals in this sector have been speaking up in support, such as through the Directors for the Voice,” he said.

Co-organised by Diversity Council Australia chair and IFM Investors board member Ming Long, the Directors for the Voice campaign has looked to vocalise support for the referendum from directors and business leaders across a range of organisations across Australia. As at the end of September, the campaign has garnered over 1,900 signatures.

One such signatory is Sarah Penn, founder and chief executive of Mayflower Consulting, who observes “very slow progress” has been made so far towards better outcomes for Australia’s First Nations peoples.

“With [the Voice], it’s hard to see what difference it will make next year, but it will make a bigger difference in the long term, and really, when you talk about constitutional change, you’re talking about a very long time. 

“[The referendum] is towards putting the building blocks in place,” she said.

Reflecting on the seeming silence of the funds management sector, she told Money Management: “These funds managers have a broad client base and they don’t want to upset anyone who might have a lot of money invested in them, which I understand, as it’s a big step to stick your neck out and say things publicly.”

For the super funds that have spoken out, she pointed out many are industry super funds that have often backed social issues publicly as part of their history with the unions.

“[They] have mostly come from a collective, union approach of ‘if we all work together, we can get a better outcome for everyone’ so it makes sense. They’ve often been at the forefront of gender equality, LGBT issues, environmental issues,” she said.

“Also, big super funds like that tend to reflect the overall Australian population, which is, they have a lot more younger people who, as we know, are far more likely to vote positive for societal change.

“With funds management, last time I checked, the average age of someone seeking advice for the first time is 43 years old. It’s older people, traditionally more conservative, with more money, so it’s a more mixed client base and a bit harder to stick your neck out.”

Taking an optimistic approach, Penn highlighted how significant progress has been made for individuals working in the corporate space.

“Twenty years ago, companies didn’t really let directors publicise their own opinion. So, while it’s disappointing that we don’t have a lot of companies taking a leadership position, it’s still a vast improvement that companies are not just more than willing, but encouraging their people to put their own ideas forward,” Penn pointed out.