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 Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
As reports flow in of investors lining up to buy gold at Sydney’s ABC Bullion store this week, two financial advisers have cautioned against succumbing to the hype as gold prices hit shaky ground.
After three weeks of struggling gains, this week has marked a return to strong growth for adviser numbers, in addition to three new licensees commencing.
ASIC has banned a Melbourne-based financial adviser who gave inappropriate advice to his clients including false and misleading Statements of Advice.
