There were some early signs. In July the Assistant Treasurer, Stephen Jones, announced a review into the Your Future, Your Super reforms. These laws only came into effect 12 months ago.  

He was particularly focused on reviewing the best financial interests obligation.  This trustee duty requires super funds to prioritise the financial interests of members over their non-financial interests.

And now we know why.  In late August, the captains of the super industry gathered at a private residence of billionaire Anthony Pratt to discuss the future of super. The Treasurer, Jim Chalmers, held court with his mentor, Paul Keating, by his side.

Higher purpose for super

The Treasurer said that he wants to redefine the purpose of super. If harnessed, the $3.3 trillion in super could solve some of the most difficult social challenges in Australia today.

In particular, the government wants to explore how the mega funds can help solve the housing affordability crisis and support the shift away from carbon-based energy to renewable, greener energy sources.  That’s just the start.  He wants to form syndicates to pool money to tackle other social issues as well.

It makes sense. Impact investing is a highly efficient way to resolve social issues. With money, we are more likely to address the housing crisis and solve the energy transition which will benefit future generations.

It’s not their money

But here’s the uncomfortable truth. The money super funds manage is not owned by the government.  And it’s not the super funds’ money either. Super funds are the custodians of other people’s money; their members.

It sets a dangerous precedent.  

Property rights are the keystone of a functioning society.  Confidence that you will retain your property is the essential foundation to building it up in the first place.  

The strength of a citizen’s property rights has been found to be the key determinant of a country’s economic performance.  

Time to engage with your super

The fact is it’s the members’ money, and you should have the loudest voice when it comes to your investment approach.

The late economist Milton Friedman said it best, “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own”.

Helping you live your values

We know most of our clients care about how their money is invested and what types of businesses they support. No one wants to make money from selling cigarettes to children in third world countries.  

At When Financial Solutions, we can help align your investments with what’s most important to you.  Money is an important enabler. It helps you live in accordance with your value system.

We won’t make any idealistic decisions that don’t reflect your values, and we will hold your super fund accountable, so they don’t either.  And if they don’t listen, we will find a super fund that will.  

 It’s not a matter of ‘if’ but ‘when’.  

This article is general and does not consider your personal circumstances so it may not be appropriate to you.  If you would like advice specific to you, please give us a call.