My ACFS colleagues and I have benefited from exposure to thinking across the three sectors and have felt validated in spreading our focus across financial services rather than specialising too much in one areas or another.
The Australian Superannuation System Review chaired by ACFS Industry Advisory Comittee member Jeremy Cooper presages major change in Australias retirement incomes arena. If Coopers recommendations are adopted, for instance MySuper, it will likely see smaller funds struggle to differentiate themselves in a busy market with pressure to consolidate. The next stage of our Melbourne Mercer Global Pension Index will be released on Wednesday October 20th and it will be interesting to see if Australias retirement incomes system has retained its high rating of 2009.
However, Coopers work is also likely to have an impact on insurance if commissions are phased out. ACFSs own work highlights the fact that despite near compulsory superannuation around half of Australians will be dependent upon the Age pension at some stage of their retirement. (Refer the report Financial Wellbeing in Retirement authored by myself and ACFS Research Director Prof Kevin Davis.) Just as longevity and annuity product design are growing issues in superannuation so too are they in insurance, and particularly in the area of disability services funding where it appears that insurance might have a larger role to play than previously considered. (see see our submission to the Productivity Commission)
In banking, reforms to liquidity and capital rules coming out of Basel in Switzerland suggest that bank capital will be more expensive at least at the margin. Our Research Director, and author of the Davis Report into Financial Guarantees, Prof Kevin Davis suggests that the banks should be alert but not yet alarmed. Our International Distinguished Lecturer BIS chief Jaime Caruana dropped a few hints in his address to us in February.
I hope you find interest in our newsletter. My colleagues and I look forward to hearing from those of you who wish to share ideas and work with us.