Industry facing 'image' issues
FORMER Macquarie Group chief executive Allan Moss has weighed into the debate over Australia's $1.4 trillion retirement savings system, saying the superannuation industry's credibility has been damaged by perceptions it has a conflict of interest.
FORMER Macquarie Group chief executive Allan Moss has weighed into the debate over Australia's $1.4 trillion retirement savings system, saying the superannuation industry's credibility has been damaged by perceptions it has a conflict of interest.Mr Moss, who ran the "millionaires factory" for 15 years, said superannuation customers had become increasingly fearful, after years of volatility and the marketing of unsuitable investment products.For the industry to regain customers' trust, there needed to be an independent voice to represent investors in debates on superannuation policy, he said."The industry is often perceived as having conflicts of interest," Mr Moss told BusinessDay."It's often perceived as, quite naturally, having to act in the interests of shareholders as well as investors. So I think that the industry doesn't always have the appropriate credibility with government, and with the public and sometimes even with regulators."Mr Moss left Macquarie in 2008 with a fortune worth more than $80 million at the time, and has rarely made public comments on the financial system in recent years.He is now helping the federal government set up an independent body to represent consumers' interests in the complex and often divisive policy debates on superannuation. Other prominent figures involved in the project include former Victorian Premier Steve Bracks, former corporate regulator Tony D'Aloisio, and Choice chairwoman Jenni Mack.Mr Moss said the initiative, which aims to help consumers navigate the complex world of retirement products, was in the industry's interest."Getting a good outcome for investors is not only about producing good financial results . . . It's also about people having confidence in the system, it's about people sleeping at night, and I think there's a lot of fear among investors," Mr Moss said."There's a lot of people who feel quite uncertain about investment and particularly about superannuation, and I think they'll feel better if they know there's somebody in their corner who's part of a dialogue with government, who's looking out for them."Though he would not comment on the behaviour of specific firms, Mr Moss said the financial industry had provided some "inappropriate" retirement products in recent years."I think there are some products that, frankly, might be fine for me, that might not be fine for everybody in the community," he said.It is hoped the Superannuation Consumer Centre which has received $10 million from government and is seeking matching private-sector funding can address the gap identified by Mr Moss. The centre aims to fund its ongoing research and advocacy role through investment earnings.After retirees lost millions in high-profile collapses such as Trio Capital and Storm Financial, Ms Mack said a key focus of the centre would be the "retirement risk zone" the five years leading up to and following retirement."We think that period is going to be a potential honey pot for fringe players, for fraud and for scams just because the amount of money is so large and the consumers are so vulnerable," Ms Mack said.With PETER MARTIN