Jonathan Steffanoni

Novigi has announced a decision to close specialist superannuation law advisory practice, QMV Legal.

To be formally closed on April 26, 2024, the decision follows the February 1 acquisition by Novigi of 100% of the QMV Solutions business.

Novigi CEO Ash Priest praised the founders of QMV Legal, noting the practice’s strong contribution since 2019 to superannuation fund trustees and their specialised needs for high-quality governance, regulatory compliance, and commercial legal advice.

“QMV Legal has made a significant impact, however a law offering is not quite a natural fit or aligned to our role as the data and technology partner to the superannuation and wealth sector in Australia. After careful review and in collaboration with the QMV Legal senior team, we have mutually agreed that the best option is to close QMV Legal.

“Novigi will continue to collaborate very actively with the outgoing QMV Legal team, and we welcome the news that Managing Partner Jonathan Steffanoni will bring a new superannuation law brand and offering to market. We will engage Jonathan’s new firm on a strategic retainer to support our team and clients in the regulatory and legal domains,” Mr Priest said.

Mr Steffanoni said: “Novigi and I both view the separation of legal and technology businesses as the right path to offer the best future for our clients, allowing both organisations to focus on different core areas of expertise.

“QMV Legal was established in 2019 to provide legal advice from a perspective that is closely placed to the business operations of superannuation trustees. We are grateful to have advised clients on a broad range of matters, including successor fund transfers, regulatory change and investigations, and material service provider contracts.

“As we transition from QMV Legal to establish a new independent business structure, Legal and Prudential Advisors, we will remain focused on providing expert legal, risk, and compliance advice to trustees of APRA regulated superannuation funds,” Mr Steffanoni concluded.

The post QMV Legal winds up as Managing Partner announces new superannuation law practice appeared first on AdviserVoice.

As chief executive, Mr Pearl will head QMV’s core advisory and consulting business alongside its technology and legal subsidiaries. QMV managing director, Mark Vaughan, will move into an executive director role on Mr Pearl’s appointment.

Prior to joining QMV, Mr Pearl spent seven years at Primacy Underwriting Management, where he was most recently chief executive. In this role he provided the team with strong leadership and made high-quality investment decisions to advance the business and increase profits. He also spent nine years at ANZ as a director within its Global Financial Markets business based in Singapore, and as a strategy analyst located in Melbourne.

Mr Vaughan said Mr Pearl brings almost 20 years of experience in managing business development across technology, sales and marketing, and client services.

“Marcus is a highly experienced and knowledgeable leader with exceptional credentials. He has a diverse skillset and a proven history of building high performing teams, as well as driving business growth and client-focused innovation.

“This experience will serve QMV well as it continues to grow capability and scale, and delivers on plans to enter new geographical markets and industries with its data quality solution, Investigate DQ”.

Mr Dominic Pelligana, QMV’s Chairman, said: “Mr Pearl’s appointment signals the Board’s belief in QMV’s continued growth trajectory, and its position as a market leading provider of integrated consulting and technology solutions.”

Mr Pearl holds a Masters of Business Administration from the University of Melbourne, a Diploma of Financial Services – Financial Markets (Foreign Exchange, Interest Rates and Debt Capital Markets) from the Australian Financial Markets Association, and a Bachelor of Commerce from Deakin University.

The post QMV appoints new CEO  appeared first on AdviserVoice.

Based in Melbourne, Mr Clamp will report to managing director Mark Vaughan, and will be responsible for developing and implementing new strategies and programs to maximise QMV’s future business growth.

Mr Clamp joins QMV after three years as country director for Australia and New Zealand at intellectual property services and software company CPA Global. Prior to that, Jonathan held senior business development and general management roles at King & Wood Mallesons in Melbourne and British Telecom in the United Kingdom. For the first 10 years of his career, Jonathan was a qualified lawyer – including seven years at Linklaters in London, advising companies across industries on corporate finance and other commercial law matters.

Mr Vaughan said Mr Clamp joins the business at a significant time in its growth.

“Jonathan has a proven track record as a strategic thinker who is driven and able to apply innovative thinking to solve complex problems.

“He brings strong experience in strategy, business development, and sales in a number of highly dynamic market landscapes, to the new role.

“Jonathan’s appointment comes at a time when we are seeing an increased appetite for Investigate (QMV’s data quality software), driven primarily by the value-add it provides into remediation, transition and regulatory projects.

“During Jonathan’s 25-year career, he has collaborated with a vast range of clients – from government and major companies to professional services firms and SMEs. This experience will stand him in good stead in his new role as he focuses on increasing business growth – including expansion outside of QMV’s traditional financial services clientele, along with taking Investigate to international markets.

Mr Clamp has postgraduate legal qualifications and holds an MA from Trinity College, Cambridge University.

The post QMV creates new technology role to capitalise on market demand for Investigate appeared first on AdviserVoice.

Mark Vaughan

Post Royal Commission, financial institutions are cleaning up their act and cleaning up their customer data, according to QMV managing director, Mark Vaughan.

“Banks, superannuation funds, insurers and wealth managers have been working overtime since the Royal Commission, unpicking data issues and, of course where needed, compensating customers for account errors such as fee-for-no-service and interest miscalculations.

“Data remediation teams in some cases have swollen to hundreds or even thousands of personnel due to the complexity and extent of work required,” he said.

A typical remediation program involves a number to steps: isolate the data error and identify the root cause, quarantine its spread, fix and compensate where appropriate, communicate with relevant stakeholders and implement change to prevent it from happening again.

“In this environment, demand for Remediation as a Service (RaaS) is increasing as external specialists are engaged to run data remediation programs entirely, or to bolster existing internal teams.

“The whole industry will benefit from this movement. There is an increased drive to ensure that remediation and preventative measures are effectively implemented to avoid expensive and time-consuming data errors happening in the first place.

“Financial institutions have always had a focus on data and we are now seeing them taking data quality to a higher level by actively implementing more robust controls and preventative measures to avoid expensive and time-consuming data errors happening in the first place.”

Mr Vaughan said the most common causes of data error in financial institutions are unit pricing errors, delays in crediting or calculation of interest, missing or incorrect information like date of birth or salary, administrative data entry error, lack of internal controls and misinterpretation of fee calculations.

“Invariably on further investigation of an original issue, many other issues are unearthed and scope creep is a major risk in remediation,” he said.

“This type of work requires highly specialised remediation experts with developed processes, calculation models and the right technology to fast-track quality remediation work and reduce costs. Without this, time and cost can blow out extremely quickly and worse. The outcome is only partial success and implementation of inadequate preventive measures.

“The reality is, having issues with data is common and normal. It’s not about having the problem, it’s about how and when you find it, and how quickly you can quarantine and fix it.

“After this initial mass-clean up, the future for financial institutions hinges on having sophisticated controls in place to keep customer data error to a minimum,” he said.

According to Mr Vaughan, it has become requisite for all financial institutions to have both a dedicated unit that owns data quality and to have proven data quality software tools in place.

“In the past, many business units each somewhat owned data quality and therefore no one owned it. Customer data held in disparate data silos is a big part of the problem,” he said.

The post Mass data clean-up for financial institutions appeared first on AdviserVoice.

Jonathan Steffanoni

Despite maintaining one of the most efficient and progressive retirement savings systems in the world, Australia should heed some lessons from overseas in 2020 if it’s to remain as pre-eminent in the years to come, according to QMV Legal partner, Jonathan Steffanoni.

Mr Steffanoni believes the velocity and breadth of change in the superannuation industry has been a challenge to many superannuation funds and industry professionals but, in order to continue as a global leader, the system needs to remain open to new ideas.

“It’s too easy to become narrow and focused in our perspectives and thinking but learning from developments abroad can only help the system to provide the best possible outcome to super fund members,” he said.

Following a recent trip to the UK to meet with regulatory and pension professionals, Mr Steffanoni said Australia shouldn’t rest on its laurels, and should take some informed guidance from the likes of the UK which, in recent years, rolled out auto-enrolment reforms.

Between 2012 and 2017, the UK extended coverage of default employer and employee contributions to most of the workforce. Contributions have risen from 3 per cent to 8 per cent of salary, with opt out rates remaining relatively low.

Mr Steffanoni believes the mandatory nature of the superannuation guarantee (SG) level has shifted the attention of Australian superannuation funds on to policy debates about the appropriate ‘minimum’ level of SG, rather than focusing on assisting members in setting an appropriate level of contributions based on their living expenses, projected future income, and goals for retirement.

“Many Australians assume that government calculated minimum level of savings must be enough. Giving individuals the ability to opt out can promote greater interest and involvement, which can also result in personally aligned decisions around the right level of contributions from savings for retirement,” he said.

The UK government also initiated a project in 2016 to develop a Pensions Dashboard, which will provide an online centralised view of all pension benefits and entitlements, which could prove beneficial to the Australian superannuation system if adopted in a similar form.

“The UK Pensions Dashboard will include detail of any government pension entitlements that an individual has, in addition to any occupational pensions.

“Obtaining access to information about government benefits and entitlements in a standard and secure format has been an ongoing challenge for superannuation trustees and financial planners in providing technology-enabled personal financial advice, so there are very possibly lessons to be learnt here,” Steffanoni said.

The post 2020 an opportune time to refine super system appeared first on AdviserVoice.

Jonathan Steffanoni

The release of a senate inquiry report suggesting extending the Consumer Data Right (CDR) to superannuation and pensions information, will lead to increased competition and improved transparency, but there are also reputational and competition risks to consider, according to QMV Legal partner, Jonathan Steffanoni.

The CDR is a competition policy which seeks to ensure that individuals have the right to access and review data held by institutions which relates to them. Open Banking, the first application of the CDR, has created an opportunity for the super industry to register as data recipients, and with member consent, use member banking information to build a better profile of the member’s overall financial situation and improve levels of personalisation.

Mr Steffanoni believes by incorporating super and pensions into the CDR – as recommended by the Productivity Commission – it will lead to the development of innovative self-service financial planning tools which will benefit consumers and reduce the costs associated with comprehensive financial planning.

However, he said there are a number of challenges to be faced in implementing the proposed changes.

“The CDR inherently introduces the strategic risk of asymmetric competition, with the possibility of third-party applications being developed to occupy the space between members and super trustees. This would see superannuation trustees losing some control over the way in which they interact with members.

“Another prominent risk is reputational, with a growing public awareness and sensitivity about the ethics and economics surrounding the use of personal data. Super trustees will need to be aware of the risks of perceived inappropriate use of member data when personalising engagements and services,” he said.

Mr Steffanoni said ensuring the accuracy, quality, timeliness, and completeness of data under the terms of the CDR regime also warrants considerable assessment if it’s to be effectively implemented.

“There are civil penalties associated with data holders failing to ensure adequate data accuracy, with super trustees needing to ensure that robust data quality monitoring frameworks are in place and adhered to.

“The use of existing standards and infrastructure, including the ATO’s Member Account Attribute Service and Member Account Transaction Service reporting mechanisms – might mitigate some of the implementation challenges,” he said.

Mr Steffanoni also believes that along with adequate sector-wide consultation, a gradual approach to transition is necessary to ensure adequate planning and oversight by regulatory bodies including the Australian Competition and Consumer Commission.

“The CDR will ultimately provide consumers with greater control and confidence over the uses of data which they choose to share.

The introduction of new rules will bring much needed confidence to consumers, he said.

“While data sharing is not new, the Consumer Data Right will result in consumers having greater control and confidence over their personal data, how it is used, and what they choose to share.”

The post Consumer data policy poised to capture superannuation appeared first on AdviserVoice.

Jonathan Steffanoni

While the Federal Government’s proposed increase in the Superannuation Guarantee (SG) could result in some workers taking home less pay, the incremental increase is likely to benefit lower and middle-income Australian’s, according to QMV’s principal consultant, Jonathan Steffanoni.

The current rate for SG payments made by employers is 9.5%, with this rate set to continue until 1 July 2021 when it increases to 10% before settling at 12% from 1 July 2025. The likelihood of employees taking home less pay will be contingent on how wages are set, the frequency and regularity of determining employment arrangements, and the wording of individual and collective employment contracts.

According to Mr Steffanoni, the planned increase is sound economic policy and beneficial to the retirement savings of Australian’s, however caution is warranted to ensure broader economic conditions and the labour market remain adequately elastic to absorb the associated cost.

“Broad assertions that the planned increase in SG will add to the cost of living pressures faced by many Australians don’t really stack up to closer scrutiny. This may simply be due to misunderstanding of the complexity and nuance in the way the SG and labour markets function.

Mr Steffanoni said that “rather than adding to cost of living pressures by reducing take home salary, an increase in SG for the 23% of Australian workers on lower salaries set by Modern Awards will increase the retirement savings of those who are set to benefit most, as wages aren’t set by the market and provide for SG in addition to salary.

Young Australians early in their careers and workers in lower paid industries often face the most pressing cost of living challenges, and it would be this demographic to benefit most from an increase in the SG. As casual employees on monthly incomes of less than $450 are not covered by the current SG system, they would also benefit from an increase in the SG and the removal of the $450 rule.” he said.

While Mr Steffanoni concedes there will be some of the 37% of workers on individual employment agreement which relies on a “total remuneration package, inclusive of SG” who could see a direct reduction in their take home pay with an SG increase, a vast majority of the 40% of workers covered by a collective agreement would be unlikely to see a direct reduction.

Mr Steffanoni also emphasised that “the salary of employees on individual or collective agreements often falls below market value, particularly where employees remain in the same role or with the same employer for a longer period. There may be pay increases, but these typically don’t keep pace with the market.

An increase in the superannuation guarantee is a blunt but effective mechanism to force improvements in labour market efficiency in times of low unemployment and wage growth – times such as those we are currently experiencing.

Consideration needs to be given to the impact on economic conditions affecting future salary increases and new agreements,” said Mr Steffanoni.

The SG has been effective in extending coverage to about 90% of the Australian workforce and while employers are not legally obliged to contribute, tax incentives have this far proven beneficial in incentivising most employers to adopt the regime.

The post SG increase to benefit lower, middle income earners appeared first on AdviserVoice.

The ways in which fund data can go wrong are infinite. What matters most is how early errors are detected and corrected, and how this impacts customers, says Stephen Mahoney, executive director at QMV.

“Achieving error-free investment and customer data is unrealistic, but effective measures can be put in place to reduce the incidence and severity of data errors and to help identify issues early.

“Early identification means before the customer is impacted, which is usually well before the customer makes a complaint and months, or even years, before a large-scale data remediation is imminent.

“A miscalculation, an administrative mistake, lack of insurance coverage, or other errors, can cause customers to feel wronged, robbed, not cared about or even marginalised.”

Mr Mahoney said the task of managing constantly-changing customer data across multiple technology platforms is enormously challenging and the more data there is, the greater the margin for error.

“Nevertheless, customers have an expectation that institutions will hold correct information relating to them, and that it will be used to correctly calculate their financial position and circumstances.

“Understanding the data risks, identifying issues early in the business lifecycle, learning from past mistakes and implementing the correct remediation procedures, will not only benefit each financial organisation but will lead to better customer outcomes. 

Mr Mahoney noted the five most common types of data errors that are encountered.

Fee calculations

“Fee miscalculations and a lack of process controls for documents – such as deeds, product disclosure statements and administrative contracts – are providing the foundation for these errors to occur,” he said. 

Interest crediting

Interest crediting issues relate to direct errors or delay issues giving rise to incorrect calculation of interest / investment returns to customer accounts.

“Delay issues may be caused by a lack of control around standard business processes; for instance, any delay in processing a customer investment switch request could have a large positive or negative impact on customer accounts.”

Eligibility issues

“Eligibility requirements around certain benefits, particularly those related to insurance or credit requirements, can have a huge impact on both customers and the institution. 

“For insurance benefits, these issues are often highly emotive because they involve someone who is hurt or has died, and typically involve large benefit payment amounts,” said Mr Mahoney.

Lack of internal controls

Another example of data error is inadequate controls around the various calculators used for financial decision making, he says. 

“For example, the Royal Commission noted that lack of controls around overdraft facilities led to clients being granted access to funds that they otherwise would not have received.

“This led to the writing off of millions of dollars of overdraft limits, and much bad publicity.”

Lack of critical information

Missing or lost information can cause serious financial errors.

“For instance, if income protection benefits are calculated based on salary, but some employers submitting electronic data for members are not providing salary with their contribution data, then these calculations may be based on incorrect or invalid data and assumptions.”

It is particularly important that errors be identified early and corrected, as when left unchallenged data errors can spread through systems like a disease.

“Constant monitoring of data would ideally be carried out in real-time or as close to real-time as can be achieved. This is particularly important, for example, for exiting customers. Once monies have been paid out, remediation becomes more difficult politically, reputationally and practically, as the organisation no longer has the funds. 

“Data held on administration platforms, advice platforms, CRMs and so on needs to be monitored simultaneously and reconciled against each other.

 “This level of oversight means that customer data is in the best possible condition across all technology platforms, and that costly remediation events are prevented. 

“Organisations that adhere to this level of data maintenance will more easily avoid the data errors that affect their business, and more importantly, affect their end customers,” Mr Mahoney said.

The post Data error “hot spots” revealed – Financial institutions need to find data errors early appeared first on AdviserVoice.

The panelists agreed that many superannuation funds that exist today will not be here in five years’ time because of underperformance, or because the advantages of a merger are deemed to be in the best interests of members.

The event featured discussion from The Hon. Nicholas Sherry – Former Federal Minister and Chair, Household Capital; Rose Kerlin – Group Executive, Membership, AustralianSuper; Katherine Kaspar – CEO, Kinetic Super; and Josh Wilson – CEO, GROW Super.

Stephen Mahoney, executive director at QMV, said that the rate of consolidation over the last 15 years has been significant and shows no sign of slowing.

“Panellists agreed that grace periods are over, with more aggressive movement being required.”

“They said mergers will be driven by a number of factors, including APRA focusing on poor performance, as well as the potential for members to push trustees to wind funds up. In addition, technology and the growth of digital offerings in superannuation is changing the industry landscape in multiple ways and will see smaller existing funds seeking new economies of scale.

“Fund trustees need to continually ask themselves whether they should continue to exist, or whether a merger is in the best interests of their members,” he said.

Mr Mahoney said that key questions raised by panel members for superannuation funds include:

• What is the fund’s value proposition?
• Does the fund provide members with the tools for a better retirement outcome?
• Is the fund competitive?
• Would a merger with another fund result in better member outcomes?

“If a merger does seem like the best option, it’s important to remember that this brings its own set of challenges and trustees must remain focused on members and their needs.

“During discussion, panellists talked about the distractions that can arise during merger talks, and how resource-intensive a merger can be. Boards and trustees need to ensure that their first duty to existing members remains top of mind.

“While a merger may well be the best outcome for members, continuing to run the fund successfully during the merger process needs to be priority.

“Before, during and after the actual merge it is crucial to have a strong, dedicated and empowered transition team, with this team being responsible for managing collaboration amongst all concerned parties.

“Mergers and transfers impact almost all areas of the business, including legal, risk, actuarial, investments, operations, marketing and information technology. Ideally, such a team would be staffed by various professionals with strength and/or knowledge across areas mentioned above, and with previous experience to help through negotiating any pitfalls that may be encountered.

“Independence from either merging party is another important factor and it often helps to bring impartiality and practicality to any hard decisions that are required.

“At the same time, knowing who your members are, what they want, and what the merger will deliver to them, is key,” Mr Mahoney said.

The post Super industry consolidation moving faster than ever appeared first on AdviserVoice.

QMV has identified four key trends that will dominate the financial services landscape in the short term – consumer focus, remediation, asymmetric competition, and fees and cost restraint.

Consumer focus

Ms Colaço says the combined effect of the member outcomes assessments, consumer data right, financial product design and distribution obligations, and royal commission recommendations, will converge to place consumers at the centre of regulatory and business activities in 2019. 

“The new prudential standard and guidance on Strategic Planning and Member Outcomes, recently released by APRA, will require that superannuation trustees rigorously assess and strive to improve performance in terms of the outcomes they are providing their members. This will involve more structured strategic business planning, a greater oversight on expenditure, and closer monitoring of performance towards member outcomes.

“While the new laws do not commence until 2020, we suggest forward-looking superannuation trustees should move quickly to align strategic business planning with the new requirements as soon as possible.”

She added that there is strong alignment between the member outcomes requirements and the proposed financial product design and distribution obligations.

“These proposed new laws require financial institutions and superannuation trustees to ensure that financial products have a clear target market and are designed and distributed to cater to and suit the needs this target consumer.

“When combined with the Consumer Data Right, the member outcomes and design and distribution obligations will shift the power towards individual consumers, providing opportunities for balancing competition-driven efficiency, and confidence in the financial system,” says Ms Colaço. 

Remediation

There will also be a continued heavy focus on remediation of existing and newly uncovered regulatory breaches.

“The more assertive regulatory posture which the royal commission has promoted will inevitably see superannuation trustees and financial institutions investing resources into ensuring timely and accurate remediation.

“Remediation of conduct, data, and system configuration related breaches can be a tricky and costly exercise; however prompt, dedicated, and specialised expertise can assist in mitigating the risks of contagion and delay.”

Ms Colaço added that existing superannuation trustees and financial institutions are paying for the technology and remediation debt they’ve built over a generation, resulting in a ‘rear view mirror’ focus rather than a forward-looking approach, which creates opportunities for new entrants.

Asymmetric competition

Following on from this, the competitive landscape for financial institutions and superannuation funds is likely to see continued attempts at disruptive innovation. However the most effective disrupters may be asymmetric, focusing on opportunities in the supply chains or consumer interface rather than direct competition.

“New entrants from the tech sector will develop to meet the demands of an emerging demographic, such as new payments platforms plugging holes in a disjointed industry but answering the needs of a community demanding immediate service and nimble products.

“It is likely we will see a flood of new market entrants looking to capitalise on market opportunities resulting from the reputational impacts of the royal commission through using modern technologies, particularly in the Banking, Financial Planning, and Insurance sectors,” she says.

Fees and cost restraint

In an environment of increasing competitive, regulatory, and technical change, it will be critical for financial institutions and superannuation trustees to ensure that costs remain within budget, says Ms Colaço.

“With the amount of work facing the industry as a result of new regulatory requirements, transparent indirect fee and cost disclosure, the Productivity Commission Report into Competition and Efficiency, and the Royal Commission Final Report, financial institutions and superannuation funds will have pressures on funding or headcount available to dedicate to innovation, differentiated product development or new technologies.

“Unfortunately, innovation may become the ugly cousin and fall by the wayside for the big players.” 

The post Fund members to take centre stage in 2019 appeared first on AdviserVoice.