The operating and regulatory landscape for super funds has never been more challenging

The operating and regulatory landscape for super funds has never been more complex with the last three years being exceptionally challenging. Some of the key themes occupying super funds and trustees include: 

 

Regulators tightening scrutiny on performance and fees
The introduction of Your Future Your Super (YFYS) which involved the stapling of funds, an annual performance test and an Australian Taxation Office portal where super products are ranked and published, changed the industry beyond recognition. The goalposts have moved and funds must ensure they balance the outperformance of benchmarks while keeping fees as low as possible. 

 

Industry consolidation
The industry is experiencing a period of consolidation like never before, as funds focus on the benefits to members at scale. Funds are exploring their options to merge with other like-minded funds to achieve the scale required to continue to compete within the Australian super fund system.

 

Diversification
The biggest challenge for super funds is to continue to deliver strong returns for their members. Super funds are seeking investments that are appropriate for the current climate of higher inflation and rising interest rates that will support and meet their members’ immediate and long-term investment goals. To this end, private markets, and in particular private debt, are an increasingly attractive option.

In a market of small margins, even a modest allocation to private debt could help super funds pass the YFYS performance test benchmark.

 

A deep dive into private markets

 

Private markets are becoming increasingly popular as investors shift parts of their portfolios away from publicly traded assets in order to diversify their risk and return drivers. 

Meet some of our Pacific team 

Clayton Sills

Superannuation Client Segment Leader

 

 

Marcus De Kock

Alternatives Investment Director

 

 

Mark Murray

Head of Unlisted Infrastructure 

 

 

Padraig Brown

Head of Real Estate Investment 

 

Challenge accepted

 

With change, naturally comes challenge.


Will super funds now accept these challenges or be left behind?

 

Find out more

Now more than ever,

we are here to help you and your business.

Speak with one of our consultants.