Super trustees missing out due to risk aversion
|
|
Super funds are missing out on investment opportunities due to risk aversion following the global financial crisis.
According to the chief executive of the Centre for Investor Education, Frank Gullone, who recently returned from trips to the US, Asia and the UK, superannuation funds have become much more risk adverse and fund managers are missing investment opportunities for fear of getting it wrong.
“This is a worldwide phenomenon as fund leaders wait to see a sustainable trend in the investment markets and are reluctant to make a move without various assurances or risk minimisation measures in place,” Gullone said.
“Many of these funds are effectively adopting a ‘wait and see’ approach to investment right now. They are opting for a more passive approach to investment.”
He said fund managers’ risk strategies were found to be inadequate in the wake of the global financial crisis and this was a key factor in the shift to conservatism, which also reflected the mood of fund members.
“As we saw in Australia, many fund members switched to the cash option in their superannuation fund, and this has also happened overseas. As a consequence, it’s put pressure on trustees to become more risk adverse.”
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
