Chant West’s integrity award recognises funds that are doing the right thing by their members.
In the current environment of increased scrutiny on the fees, funds may be tempted to reduce costs in ways that are not in the best interests of their members. We want to recognise the funds that are finding the right balance between offering lower fees and premiums but continuing to provide benefits and services that members really need, including quality investment and insurance, financial advice and effective member engagement.
We will also continue our focus on disclosure. Our award recognises funds that are doing the right thing by telling their members what they really need to know about fees and insurance, in a way they can understand, and complying with the spirit as well as the letter of the law.
2 | Best Fund: Innovation
Recognising innovation within the industry is a key theme of the awards. We continue to see innovation in many areas such as member segmentation, insurance design, retirement income solutions, account consolidation processes and member communications. This year we have contenders from most of those areas.
3 | Best Fund: Advice Services
Most fund members probably need financial advice at some point in their lives, especially in the period leading up to retirement.
With this award we are not assessing the quality of the advice itself but rather the range of advice services that funds offer, whether through in-house advisers or by arrangement with external advisers. These may include some or all of scaled advice, online advice and comprehensive advice. Importantly, we consider each fund’s strategy and its ability to provide advice services that are relevant and accessible for all their members, which can be challenging for the very large funds.
4 | Best Fund: Insurance
The spike in claims in recent years has led to many funds reviewing the structure of their insurance to see whether it delivers the right benefits to the people who really need them for a reasonable price.
Assessing a fund’s insurance offer is one of our most difficult tasks, because insurance is so complex and individual specific. Premiums vary according to age, gender, occupation and smoker status, meaning that there are about 1,000 individual situations to assess. We take all those situations into account when assessing premiums – and of course we also look at policy conditions and the appropriateness of the benefit design. When looking at disability insurance, we also consider what funds are doing to achieve the best outcome of all – helping the member return to work.
5 | Best Fund: Investments
Investment is the most important aspect of superannuation. We assess funds on their investment processes and resources and whether they are likely to deliver strong returns. The key issues are the quality of people and processes. We look closely at investment governance, including the investment experience of the Investment Committee and the internal investment team, and who is actually responsible for making decisions.
Ultimately, the aim must be to deliver the best possible results for members after fees and tax. For many years, the best net returns have come from funds that have maintained a significant exposure to unlisted assets – property, infrastructure and private equity – in their investment mix. Those asset sectors do incur higher management fees, and with more stringent disclosure of fees coming into effect there may be a temptation to turn to lower cost sectors. We are on the lookout for that, and for the use of passive management simply for the purposes of cost saving, which is generally not in members’ best interests.
6 | Best Fund: Member Services
Member services are the second most important aspect of superannuation, because they have the ability to engage members and so help them make the most of their super.
This year we have placed particular emphasis on what successful funds are doing to engage their members and lead them towards greater involvement with their super. What information are they providing and what advice are they making available, for example to help members grow their super as they approach retirement.
7 | Best Fund: Longevity Product
Investing in retirement, as opposed to investing for retirement, is one of the hottest topics in the superannuation industry. At present, there are only a handful of products that truly cater for retirees’ needs.
We are keen to encourage funds to develop new and innovative products for retirees. With policy makers slow to move, there still needs to be more innovation and more lobbying to help make longevity-aware products more viable.
8 | Specialist Fund of Year
While most major funds have a broad spectrum of members, there are others, both large and small, that cater for a fairly homogeneous group – often from a single industry or occupation – that has unique or specialised needs. To satisfy those needs, these funds need to pay a lot of attention to their benefit design and members services.
To compete for this award, funds still have to score well in all the main criteria we consider. In addition, we take into account what they do that is specific to their membership and results in greater member engagement and better retirement outcomes.
9 | Advised Product of the Year
Retail master trusts mostly target people who are more engaged with their super – so-called ‘choice members’ – who have different needs to the majority of default fund members. They generally have advisers and seek a wider range of investment choices and more ‘bells and whistles’ in the services the fund provides.
This award recognises funds that score well in our main criteria and have also invested in dedicated systems to help advisers manage their client base and access their client details.
10 | Corporate Solutions Fund of the Year
Many Australians working for medium-sized and larger employers have their super with a corporate plan. There are about 20 funds, mainly master trusts, that cater for this sector.
This is a large and important segment of the industry, with assets of about $150 billion and about 4 million members. There are substantial economies of scale available, and we look at how these have been harnessed and applied in the best interests of members.
11 | Pension Fund of the Year
The pension fund award takes into account the same criteria (with the exception of insurance) but recognises that the pension phase is very different. The award relates to the typical retiree member, who has an account balance of about $200,000. They have different priorities and place different demands on their funds compared with accumulation members, and our methodology reflects that.
12 | Super Fund of the Year
The super fund award focuses on the experience of a typical member, that is, someone with an account balance of up to $50,000 in their employer’s default MySuper fund. It recognises excellence across a range of key criteria, namely: investments, member services, fees, insurance and organisational strengths.