Jeremy Cooper may not be planning wholesale changes to our super system. On the other hand, his comments in an ASFA plenary session suggest he's certainly not entirely buying the industry line that "it ain't broke so don't fix it".
In a wide ranging speech, Jeremy Cooper outlined the potential governance issues facing the industry in 2025, including the potential for a group of four "super" super funds to dominate the landscape, providing direct private equity sources of funding and wielding far greater leverage in their investment decisions. Cooper drew a parallel with Canadian behemoth funds Ontario Teachers and the Canada Pension Fund.
In this brave new world, the superannuation industry "dog" would no longer be wagged by the funds management tail. Cooper shared a possible view that super the system, if re-designed around members' interests, may look significantly different to the possibly funds management-centric structure of the industry today.
He asked if perhaps superannuation trustees are captive to their service providers, and suggested that without greater scale our funds are at a significant disadvantage in bidding for access to global assets.
In a message that made trustees happy, although perhaps didn't deliver joy to fund managers, Cooper suggested "Super funds have to start acting like they are at the top of the food chain", using their power to benefit members.
Other advantages of scale? Lower fees, in-house investment expertise, improved diversification, lower admin costs per unit and better member education.
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Tuesday, November 17, 2009
Will Cooper reshape the world of super as we know it? ASFA Day 2
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