The new board directors, Professor Alec Cameron, Professor Hazel Bateman and Rebecca McGrath, bring with them a wealth of experience across several industries including academia, finance and research.

Professor Alec Cameron brings over 22 years of leadership experience to the UniSuper Board. He is currently ViceChancellor and President of RMIT University and has held previous senior leadership roles at universities in Australia and the United Kingdom. Alec is a Rhodes Scholar and holds a PhD in Robotics from Oxford University.

Professor Hazel Bateman, a Professor in the School of Risk & Actuarial Studies at UNSW Sydney, has significant expertise in superannuation, pensions, behavioural retirement and lifecycle finance. Throughout her acclaimed career, Professor Bateman has consulted to leading global financial institutions including the World Bank and the OCED bodies in China and South Korea. She also held the role of Chief Investigator and Deputy Director of the ARC Centre of Excellence in Population Ageing Research (CEPAR).

Rebecca McGrath has enjoyed an extensive international career in the energy and resource sectors, including 24 years as an executive with BP in Australia, the United Kingdom and Europe. She has also served on the board of numerous public companies including CSR Ltd, Goodman Group and Incitec Pivot Ltd, and was Chairman of Oz Minerals Ltd.

The new board directors bring with them a unique skill set, which includes extensive experience in strategic leadership and corporate governance.

“We are thrilled to welcome such accomplished leaders to our Board,” said UniSuper Board Chair, Gregory Mark Armour.

“Their diverse backgrounds and experiences across a range of industries, will help us continue to shape UniSuper as a high performing fund which delivers for its members. Their extensive leadership experience will be crucial in guiding strategic initiatives across the fund.”

The new appointments follow the departures of Professor Lelia Green, Professor Peter Dawkins and Nicolette Rubinsztein, who all reached their term limits after nine years of exemplary service.

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Dr Irene Guiamatsia

The long-term outlook for self-managed super funds (SMSFs) is promising and exciting as an increasing number of younger people want to take control of their personal finances, the SMSF Association Thought Leadership Breakfast heard at its National Conference Yesterday.

The five-member panel, dissecting the topic How big can the SMSF sector BE? moderated by Class CEO Tim Steele, offered myriad reasons for the sector’s continuing growth, including individuals wanting to take personal control over their finances, asset allocation, and supply-side factors.

Investment Trends Head of Research, Dr Irene Guiamatsia, said: “Although the average age of SMSF members remains high at around 60 years of age, SMSFs are being established at a younger age, boding well for long-term growth.

“For this cohort, the main driver for growth remains the desire for control. Early exposure of Millennials and Gen Z to digitally delivered financial services reinforces control as an important component of their engagement with service providers. Also, Australians’ well-documented bias towards direct property as an asset class, and their desire to access it, helps stoke SMSF establishments.

“Supply side factors, such as low-cost initial setup, greater synergies between accountants and adviser practices and a slightly softer regulatory posture also play their role.”

Heffron Consulting Managing Director, Meg Heffron, said younger people will end up with larger balances at the same life stage than older generations and are more engaged – so the fact that SMSFs are perfectly suited to be someone’s ‘platform for life’ makes them well positioned for the future.

“And a strong SMSF sector is actually important for the whole super system.  SMSFs drive innovation that eventually trickles through to the broader superannuation space.  We only have to look at the great improvements retail funds have made when it comes to offering investment choices to see how competitive pressure from SMSFs improves super choices for everyone.”

SMSF Association Deputy CEO/Director of Policy & Education, Peter Burgess, said Association-commissioned research by the actuarial firm Rice Warner into costs, and the University of Adelaide into performance, have demonstrated the sector’s competitiveness on reaching the critical mass of $200,000 and this will hopefully be a key driver of growth.

“This research is already having an impact with ASIC releasing updated SMSF Advice materials late last year removing references to $500,000 as being the minimum recommended balance to start an SMSF.

“Ensuring SMSF members do the right thing is critically important and having access to quality SMSF advice is a big part of that.

“If we get this right the sector can achieve its full potential, but if we get it wrong we may see restrictions and conditions imposed that could stifle the growth of the sector.”

On the issue of whether a growing SMSF sector will be vulnerable, Professor Hazel Bateman of the University of NSW’s Business School of Risk & Actuarial Studies noted that financial literacy is poor across the entire population and that it declines at older ages. “Yet people tend to be over-confident of their abilities, with the data from the nationally representative HILDA (survey showing that self-perceived financial capability increases with age.

“Behavioural biases are also important. Procrastination might lead to some not adequately managing the SMSF they have established or using inappropriate metrics to measure its performance.

“Ensuring that SMSF members have access to appropriate advice is very important. It is important that the advice is good quality – related academic research shows how people are vulnerable to ‘first impressions’ and ‘confirmation bias’ and may stick with ‘ineffective advisers’.”

Steele concluded: “Today’s panel discussion and audience engagement demonstrates a sense of collaboration among industry participants to help shape the future of the SMSF industry and improve the retirement outcomes for more Australians.

“As an industry participant, Class will continue to innovate and invest in technology solutions that enhance business efficiencies, scalability and create value.”

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Josh Funder

Researchers from UNSW Business School will investigate behavioural and other issues behind the low uptake of reverse mortgages in Australia.

A reverse mortgage is a loan that enables homeowners to access their home equity; the homeowner can borrow without having to make repayments while living in the home.

Home equity is typically the largest component of total household wealth, so a reverse mortgage can complement superannuation and the age pension as a financial resource in retirement.

Senior Research Fellow Dr Katja Hanewald and Professor Hazel Bateman will investigate theoretical and empirical aspects of reverse mortgage demand and product design.

“While economic theory predicts that households would demand reverse mortgages to improve retirement funding, the take-up rates for reverse mortgages are low in Australia and internationally,” said Dr Hanewald.

The Business School is funding the two-year research project with industry partner Household Capital, which offers services to enable older Australians to combine their superannuation, pension and home equity to provide retirement funding.

The research team will investigate the impact of behavioural factors as an explanation for subdued reverse mortgage demand.  “Combining our research track record and Household Capital’s industry expertise, we will design, and field test, an online experimental survey to study the role of mental accounting in the demand for reverse mortgages,” Dr Hanewald said.

“By investigating behavioural explanations to the ‘reverse mortgage puzzle’, this research will address demand and supply side barriers to further development of a reverse mortgage market in Australia and internationally.”

Dr Joshua Funder, CEO and founder of Household Capital, said: “Overseas markets have been expanding rapidly to provide access to home equity to fund retirement.”

“We’re delighted to work with UNSW Business School to understand the needs of Australian retirees and how we can improve access to home equity to improve retirement their funding.”

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