Outgoing First State Super CEO Michael Dwyer (Photo: Matthew Fatches)
FIRST STATE SUPER’S outgoing chief executive, MICHAEL DWYER has seen the industry transform over his 14 years in the role. As he readies to pass the baton, he shares his outlook for the future and discusses the importance of people and trust.
IT’S HARD TO imagine the Australian superannuation industry without Michael Dwyer in it. He’s been a central figure for the last 30 years, longer than the mandated system, a status acknowledged when he was appointed a Member of the Order of Australia in 2011. The honour also recognised his contribution to another great passion, the UN Refugee Agency’s Australia for UNHCR.
Dwyer announced his retirement in June. During his tenure as chief executive of one of the country’s largest super funds, First State Super, he has seen fundamental changes, including enormous business growth, a successful merger, public offer status, and the rise of financial advice.
It’s his wisdom that will be missed by those who work with him. Dwyer is admired for his softer skills, in particular his compassionate approach to leadership.
Neil Cochrane, who has been chair of First State since 2014 and was also a former Fund Executives Association Ltd (FEAL) chair, says “Michael’s personal empathy and wisdom are deeply valued by many of us. Many times, I have asked myself, ‘What would Michael do in this situation?’ before tackling a challenge. I am so grateful for his influence and friendship.”
Dwyer joined First State Super from Asset Super in 2004. Under his leadership, the fund has grown from $9 billion and 450,000 members to nearly $95 billion and 800,000 members. It now has 26 regional offices nationally with 1000 staff split roughly equally between super and the advice business (StatePlus).
“The business is a lot more complex now than when I started at First State Super 14 years ago,” Dwyer says. He’s sitting in the First State boardroom holding Super Sam, the brand icon that represents the fund member. Sam is a physical reminder, he says, that all decisions made at the fund need to be made with the members in mind.
“I’ve been at board meetings where directors will pick this up [Super Sam] and hold it in their hands and as we’re talking about a product or a service, they are asking how it might benefit the member, this person,” he says.
Under Dwyer’s leadership, First State has grown organically and via the arguably more arduous route of the merger. It achieved public offer status in 2006, which opened the government fund to the public, and underwent a merger with Health Super in 2011. It also went through the integration of its advice business following the acquisition of financial planning group StatePlus in 2016.
Some industry observers see the potential for self-interest to be an obstacle for mergers, but Dwyer is not as cynical about why there haven’t been more of them in the industry.
“In my experience, many funds that are smaller than ours do a great job for their members in terms of investment returns costs and relevance to the members in a particular industry or sector,” he says. “The chemistry that makes a merger work will be different depending on the partnership.
“Even a big fund needs to have a sustainable business model going forward that ensures it can continue to invest in new products and services, and new forms of delivery for members. Whether mergers take place between funds is a deeper, more complex question than [what could be addressed with] a simple answer that says people don’t want to merge because they want to stay independent for its own sake.”
Dwyer confirms that First State Super is having a number of active discussions with funds looking to form partnerships.
“I’m very optimistic about that,” he says. “We are in the fortunate position of having a very strong base with $70 billion in accumulation and $25 billion in assets in the pension phase and a huge network of offices and planners. Other funds are attracted by that.”
People are at the core of success for Dwyer, whether it be in his personal endeavours, at First State Super or with a merger.
“People do business with people they know and trust and like doing business with,” he says.
As the industry has experienced this year amid the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, trust is top of mind. It’s something Dwyer takes seriously.
“We see ourselves as privileged to look after the retirement savings of nurses and midwives, teachers, police and emergency services workers; they are often referred
to as the carers of society, they are trusted by the community,” he says. “We’ve been given the responsibility to look after their lifetime savings, and we should project the same values they do and [show that] just as the community trusts them, they can trust us.”
Dwyer was the founding chair of FEAL in 1999, remaining on the board, and has been a director of the Association of Superannuation Funds of Australia since 2009. He says many of his colleagues are focused on the notion of trust.
“I’ve been fortunate that I’ve had that opportunity over many years now to join the debate and discussion about the industry,” he says. “I’ve got more out of it than I’ve given, because when you build trust with colleagues and have those relationships, the sharing of information is just amazing.”
With people key to Dwyer’s success, he admits the biggest challenge as a chief executive is getting the right ones on the bus.
“One of the sayings we have around here is, ‘No perfect people allowed.’ We will make a lot of good decisions but sometimes we may not get it right and hopefully we will be honest about it, learn from it and not repeat it. It’s a challenge as a leader.”
In hiring, Dwyer looks for intellectual strength and experience but he is a big believer that those qualities alone will not be a differentiator in a competitive market.
“People who exercise wisdom, judgement and a strong moral compass and who want to be here for the right reasons – they are the people we want,” he explains. “If you want to become a gazillionaire, this is probably not the place you should come. But if you really want a job with a purpose, and to be fortunate enough to impact people’s lives in a very meaningful way by what you do, that’s the sort of thing we look for.”
‘Excited’ about Successor
Deanne Stewart, the incoming chief executive of First State Super, started in the job on Monday, October 22, allowing six weeks of transition with Dwyer.
“No matter how good the current leader is, a new vision after 14 years is going to be appropriate and exciting,” he says. “I’m excited by Deanne’s appointment. I’ve known her for a good number of years and she brings youth and intellectual strength and vision to the role. I’m very optimistic she will be a good leader for us. It’s also good to have a female leader of a fund where almost 70 per cent of members are female.”
It’s no surprise that Dwyer’s wisdom and strong moral compass are now reflected in the organisation he has led for the last 14 years.
“I want the staff to bring their whole self to work,” he says. “Another saying we have is, ‘I don’t care how much you know until I know how much you care.’ I want to be an employer people want to work for and want to give their very best, and [for whom] they do that because of values and leadership not because we can out-pay someone else.”
Being a chief executive, especially one who has a holistic approach to leadership, is not easy.
“I always say the best thing about being a CEO is you know everything that’s going on, and the worst thing about being a CEO is you know everything that’s going on. By that, I mean caring for the entire life of a staff member, so that if someone needed time to deal with a family issue, we would give them that support,” he says.
Drawing attention to the plight of women in super is something Dwyer remains committed to and if there is any unfinished business in the industry, he thinks it is the gap between female and male savings. “To have women sit at half the savings of men at this stage of our development is unacceptable,” he says.
In the first week of December, a week after Dwyer leaves First State Super, he’ll fly to Geneva to map out the 12-month strategic plan for the United Nations High Commissioner for Refugees, an organisation he chairs in Australia.
With the support of the First State Super board, Dwyer has championed the establishment of a paid internship program for recently resettled refugees and asylum-seekers and the fund has just placed its fifth intern. After so many years, leaving the industry does bring about some reflection on the challenges it faces in putting members first.
“There will be challenging times ahead and the importance of superannuation as part of the economy is a responsibility that rests on the shoulders of all funds and is very significant,” Dwyer says. “But I’m very optimistic the directors and leaders in the industry are up to the challenge. I’ll be watching the industry with great interest.”