The COVID-19 crisis has added even more complexity to a rapidly-changing super fund sector – and has disrupted or at a minimum delayed the market trends that were becoming established over the last few years. The 2020 KPMG Super Insights Report and Dashboard evaluate the current state of the super industry and considers the challenges it will face in the coming years.
The KPMG Super Insights Dashboard presents leading analytics applied to 15 years of APRA and ATO-published-statistics. The interactive dashboard can be filtered to view industry and fund metrics for a particular year or segment of the market and to view metrics for an individual fund in comparison to a peer group.
Key focus areas for funds
The Super Insights 2020 report discusses a number of areas which KPMG believe will be key challenges and opportunities for funds.
- Mergers – while retail wealth businesses look to separate their super and wealth businesses from their core operations, merger activity continues to increase among industry, public sector and corporate funds, most notably among the larger funds.
- Insurance in Super – the impact of COVID-19 will place pressure on claims, premiums and retirement benefit erosion, creating challenges for trustees in addition to the PYS and PMIF requirements.
- Member Outcomes – the member outcomes assessment is forcing trustees to rethink their strategic objectives and business planning, taking into consideration the different cohorts of their member base.
- Design and Distribution – the design and distribution obligations will impact product strategy, design, distribution and the product life cycle and should not be considered separately to the member outcomes obligations.
- Trust & Social License – trustee boards are placing increased importance on maintaining public trust and protecting an organisation’s reputation in order to stay competitive in an industry that is under increased scrutiny.
- Risk & Regulation – with APRA updating its supervision frameworks and ASIC taking on an enhanced superannuation supervision role, the push to lift governance, culture, remuneration and accountability standards across the industry continues.
- Tax – the ATO SAR program highlights that funds need to focus on key areas reviewed, particularly tax governance and tax data integrity, with many funds placing significant reliance on third party data and systems, and challenges in aligning accounting and tax results.
- Royal Commission Legislative Response – trustees and platforms should plan for the implementation of a number of legislative changes including recommendations from the Royal Commission.
- Financial Advice – with the financial advice sector changing significantly and adviser numbers declining as a result of regulatory developments, now is the time for trustees to review and develop their advice strategy and operating model so they are in a position to provide their members with affordable financial advice.
- ESG – Australia’s recent experience with droughts and bushfires have led to increased focus and community pressure on funds in relation to their investment responsibilities which is in top of existing and increasing regulator focus in this area.
