Winning the Fund of the Year – Overall award at the Conexus Financial Superannuation Awards for 2016 reflects a depth of expertise right across the operations of a superannuation fund, chief executive officer of UniSuper, Kevin O’Sullivan, says.
“We’re not just good at members services, were not just good at investments. Given that that type of [awards] process it means you have to do well across the board,” he says.
But that doesn’t mean O’Sullivan believes the job is done, nor that the fund cannot improve further in its services to members.
“Like many other funds we’re doing work on digitising the business better, we’re doing work on post-retirement products for members,” O’Sullivan says.
“We’ve got a goal to become more efficient and reduce fees over time. Do I think that we’re doing badly in any of those? No, I don’t – that’s the progression we are on. There’s nothing broken.”
But O’Sullivan is wary of calls for bold and creative innovation in the superannuation industry, arguing that progressive improvements and controlled member engagement are likely to produce better results.
“My chief investment officer, John Pearce, calls it ‘logical incrementalism’,” O’Sullivan says.
“We manage a little over half of our money in house We didn’t just turn that on one day and say let’s run half of our money in house. Five or six years ago we said we can run a pretty vanilla fixed income portfolio; let’s see how that goes with $1 or $2 billion. That works well, so the next thing is we can do a relatively core Aussie equities portfolio.
“So gradually, over time we’ve built up. We had relatively small amounts that built up over time, and that’s essentially how we’ve done it in the investment space.”
O’Sullivan says he accepts that for most people – most fund members – superannuation isn’t sexy.
“The question I have is, ‘do we want superannuation to be sexy?’” he says.
“Everyone in that room [at the awards ceremony] wants us to lift member engagement, but at the same time I’d say that a lot of people in the room don’t want to lift member engagement to the point that [members] start making all these changes to their superannuation over time, whether it’s changing their fund or changing their investment option.”
O’Sullivan argues that if the superannuation industry continues to innovate, but to innovate in incremental steps and in ways that produce clear member benefits, the long-term results will be better.
“In fact, if we do a good job as an industry, what will happen is there will be less movement [of members when markets are volatile] because we’ll have put members in good investment options,” he says.
“Engagement is great, but not at the [cost] of ‘activity’ equating to ‘better’. Activity can mean better, but it can also mean worse.
“Think about what’s happened during market downturns or market volatility, if [members] are really engaged with their super fund, they might say I’ve got to jump in or jump out. That invariably is not in their best interest.
“Engagement is great, but it’s got to be the right kind of engagement.”