Can Superfix lamb tariffs or should it even try?

It's Zanna Benson here and on this episode of that Super Show, Sarah and my dad are grilling government brainwaves, unpacking the ACCC's approval for grow acquisition by Muffg, digging into trusty limits on member investments, debating advice fees paid from super, and getting set for a blitz of super conferences.

Let's get started.

Welcome to that super show, the podcast where we talk about all things super from the inside.

Hi, I'm Neil Benson, Chief Product Officer at Chandler cx.

And I'm Sarah Penn, CEO of Mayflower Consulting.

Each week we unpack what's changing in the industry, what funds are wrestling with and how tech and regulation are shaping the landscape.

Sometimes we bring in expert guests, but mostly it's just us having a real conversation about how super is working and what could make it even better.

Let's get into.

Well, good afternoon Neil and welcome to another issue of that Super Show.

How are you?

Thanks Sarah, thanks.

Your best BBC introduction.

I really appreciate it.

Thank you.

Thank you.

Sometimes I try and sound sensible.

It is of course going to disintegrate in the next 20 seconds because first up we've got to talk about is the Trade and Tourism Minister.

Federal Minister Don Farrell has suggested that super members savings should be invested into U.S. meat processing FAC facilities to avert lamb tariffs.

Oh listen, I. I love the good work that successive governments have done to, you know, legislate the purpose of Super.

Enshrine the fact that funds have to act in members best interests.

All that is good and proper and has built a very stable system.

I don't think the Prime Minister helped that case with words to the effect of, you know, we should look at nation building activities with superannuation funds.

I leave it out to my fund please.

Whether or not that's a worthwhile investment, whether it's public housing or US meat processing plants.

I don't get it.

Mr. Farrell, what are you thinking?

I just think it's crazy.

And I'm so interested to know whether Farrell has had and I haven't even looked it up, so I have no idea how many times he's been to the us Whether he's had any nice lunches that have been paid for by someone from some US meat processing facility, whether he owns any shares in any meat processing facilities in the U.S. you know, there's some very good meat processing facilities in Australia as it happens.

In fact there is an entire super fund, Australian Food super that is dedicated only to meat and vegetable Food processing facilities.

There you go.

I don't think those kind of comments from a tourism minister are particularly helpful at all.

And it just pours gasoline on the idea that, you know, the government is trying to direct members funds into PETS projects to help with international diplomacy.

Whether it's NRL stadium in Papua New guinea or whether it's, you know, funding investments in meat processing plants overseas.

No thanks.

Let my super fund make those investment decisions on its own accord, thank you very much.

Couldn't agree more.

Interestingly, and I reckon what's perhaps given him the idea that maybe this is okay to even say out loud is because in the UK pension funds do actually have.

They, it's now legislated.

They have to put a certain allocation into local UK developments or whatever.

I can't remember the exact details around it, but there is a proportion of the pension fund savings that have to go into government legislated things, which I think is absolutely terrible and ridiculous.

And I think as soon as you have more than one aim with these things, you're on a very, very slippery slope.

And we've done such a good job over 30 something years to stick to the point that super is supposed to be about having a decent retirement, not about fixing 55 other things.

Yeah.

But you know, I think he's made a great case for SMSFs and pulling your money out of big industry super funds if you're scared of this type of thing.

So it just sends out all the wrong messages.

Yes.

Yeah.

To members and to Australian citizens.

It absolutely does.

To say nothing of my.

One of my personal things which is about food production and the what good sustainable.

And I don't mean greeny sustainable, I just mean business sustainable food production looks like and delivering decent quality calories to the people in your country.

And I would not put American meat processing facilities at the top of that list.

Just saying.

Allegedly.

Yeah.

On the other hand, Americans spend about $6 trillion a year on healthcare, a couple of trillion dollars a year on food.

And food and healthcare are inextricably linked.

I think if Americans had better food they would spend less on healthcare.

That's probably the same for every country.

So I think, I think we should invest in Australian food production facilities first.

Yes.

And then we can worry about somebody else later.

But again, it's not a job for super, that's a job for the food industry and for supermarket shoppers and that's right.

Everybody else, that's a different podcast.

Let's stick to our knitting, please.

Minister.

The thing for me is if the government wants to want super to invest in more things like because there's been a thing around, super should be investing in housing, for instance, if the government wants more money to more investment to go into housing, then it needs to think about the tax settings and whatever else it has to make housing a more attractive investment vehicle for large investors.

That's government's job, not any of this.

Anyway, I'll stop now.

What have we got next, Neil?

Well, my friends at Grow have been, as you know, there's been an offer to acquire them by mbfg.

That proposal has been subject to a couple of different regulatory approvals.

The first one has come through, so the ACCC has approved that acquisition, but the manner in which they approved it, well, there's a little bit of a slap on the bum at the end of the approval.

So they kind of scolded Grow for having insufficient capital to enter the market and for winning over too few customers to be sustainable innovating.

And Superannuation is tough enough without, I think a regulator like this scolding you for not blowing the doors off and winning lots of customers and securing lots of capital.

It really puts a dampener on anybody else trying to do the same thing.

Why would you do it when the regulator is going to take out such a harsh point of view?

It does take enormous amounts of money and winning the business of conservatively run superannuation funds is tough.

There are lots of risks to consider and funds don't transition to new service providers lightly.

Grows me a great stab at it and I take my hat off to them regardless what the ACCC thinks.

Yes, I, I am of the same feelings, to be honest.

It feels like they had one thing and it's not that it didn't go that well because no massive changeover of technology ever goes amazingly well.

So with some realistic expectations.

But the Hesta transition, it took three months and honestly I can see how at HESTA and Grow before that they would have been sitting there going, the best way to do this in an organised fashion is to take the time we need to make sure we do it in a risk managed fashion.

And they came up with three months.

Now, that turned out to not be a good idea, but it's one transition of one fund and somehow that was enough for the whole thing to implode and come tumbling down like they've never had it.

They haven't had a chance to do another big transition, that they've just, you know, having to be bought out.

They can't get the money anyway.

It's just it's very sad.

It is.

And I have to, you know, declare a conflict of interest here because Chandler, where I work, is a service provider to Grow.

Yes, we love working with the Grow team.

And Adam G, their chief of strategy and deputy CEO, has recently joined us as our new APAC CEO.

Yes.

Very wise, very wise.

I think it's.

I think it's that thing though.

You don't.

It's not really about the ins and outs of this particular.

No, it's not transaction particularly or the Hester transition particularly.

It's more the bigger picture of someone tried really hard or a group of people tried really hard to do all the right things, to do something new and interesting, to solve an ongoing problem that everyone whinges about incessantly and when push came to shove, everyone took their hands off and went, oh yeah, no, we can't help.

Sorry, see you, bye.

Yeah, yeah.

Well, it's certainly going to dissuade any other potential Australian startups from entering that scene.

The message in ACCC seems to be you need to be huge, well capitalized, which probably means international and well established.

Yeah, yeah, yeah.

So all of that unfortunate.

Interestingly actually it's a bit of a comparison.

So BT Panorama, they used an overseas technology that then of course had to be modified significantly to work here.

And the Panorama it spend is rumored to be approximately $1 billion.

Wow.

Yeah, wow.

And somehow because it happens in not profit to member land and all the rest of it, somehow that just happens and doesn't fall into the, you know, that's the worst thing ever.

You can't possibly do it.

But I mean a billion dollars, that's crazy.

That's a stonking amount of money.

Yeah.

The last reported figure in the media I think was about 750 and it continued at pace after that.

Anyway, there's a lot of allegedly in that from what I hear and that scuttlebutton rumor and what.

Whatever the rest of it.

But even 750 million is still a very, very large amount of money.

Yeah.

What else have we got?

Well, something much more exciting.

Sarah, you're going to have to leave this one.

The prudential standard SPS530,.

Mate, the excitement.

So this one is all about trustee limits.

And what a trustee limit is about is saying if you are a trustee of a super fund, you have a limit on how much a member can put into a single investment option and this is generally applied to platforms.

But if you're a super fund that has single asset investment options, then realistically it should be applying to you too.

Whether or not it does is a different question.

So should there be a cap, say 20 or 30% or some other number of how much of a whole someone's entire super holdings they can hold in one investment option?

MySuper exempted of course, but the whole point of MySuper is that they are balanced products that actually have a lot of products that feed into them.

So you're never on the hook for SHIELD and First Guardian type Pallava.

The interesting thing is every platform I've ever come across has had trustee limits in for as long as I can remember.

The thing is though, trustee limits are always commensurate with the risk of the asset class.

So for cash and TDs there's no trustee limit up to very highly volatile, super exciting things.

You might have a Trustee limit of 10%.

The problem with Shield and First Guardian or One of the, one of the many problems with SHIELD and First Guardian is they weren't sold as products that had that were high risk and high volatility.

They were sold as very low risk, basically like a bank account.

And so there were no.

Yeah, cash plus, you know, so there was no banking.

So there was no trustee limits around.

As far as I'm aware there were no trustee limits around those products because they were sold as being like cash.

So interestingly, I use a member directed investment option with an industry super fund and there are trustee limits there.

Yes, of course 20% has to remain with one of their pool investment options and then there's an approved list of products I can invest in.

A pretty short list, about 300 ETFs from memory and I can only invest 20% of my super in any single ETF.

And that, you know, I understand the limit showing that there's another major super fund, another major industry fund with a member directed investment offering and they have completely different elements.

First of all, there's no 20% has to remain in the pooled option.

You can put everything into the member directed investment option and in there you can make much more liberal choices with what you invest in.

Similar kind of controlled product list.

It's not crypto and SHIELD and First Guardian managed investment schemes or anything like that.

But it's interesting that different funds, investment risk teams have taken slightly different approaches to meeting these kind of regulations and standards.

Yes, well there haven't really been any standards or regs around this before.

It's more been the thing of having to, you know, when you are holding money in trust for someone else, which means acting in their best interest.

Even at the broadest meaning of those words, when you're holding money in trust for someone else, you are doing what is in their best interest for them until such time as they can get their money for whatever reason that you have trustee limits to stop people inadvertently doing something stupid to themselves before they can get to their money.

So, yeah, it'll be very, very interesting.

And there was another thing sort of associated with that as well, which is advice fees.

Which is what is a reasonable amount of money that you should be able to take out of your super to pay advice fees.

For instance, if there's 3 million bucks in your super, is it okay to pay your advisor 50 grand a year out of your super?

Well, it seems like a lot of money, but as a percentage of assets, it's probably pretty low.

Pretty low, yeah.

Yes.

Or conversely, should there be some kind of dollar and percentage limit?

Should it be, I don't know, 2% of your money in your account or 5% or some kind of staggered thing?

So it's, you know, up to $10,000 is okay for everybody and yada, yada, yada.

So there's quite a bit of discussion around that.

And I know that having spoken to a number of platforms, people are really trying to think about what the best way to come up with a number is or come up with something that's going to work before APRA just comes down with a sledgehammer and puts something in place.

I've seen some debate on LinkedIn, mostly from the financial advice sector, with concerns about industry super funds having an oversight role into advice fees.

So if I've got a third party financial advisor and I would like the money released from my fund to pay for their fees, trustees now have an obligation to provide a little bit of oversight to make sure that's a decent statement of advice.

And they're a bona fide financial advisor and the fees are reasonable.

And financial advice like, whoa, whoa, whoa, here are these people trying to determine whether or not my business is signed and my relationship with my customer is bona fide and all the rest.

And it can be a little disquieting, I imagine, for a few financial advisors and providing the statement of advice to the trustee, there's an argument to be made that releases all kinds of private information about the members, other assets, their marital status, their home, all the other stuff that's in a statement of advice that the member may not have disclosed or won't disclose to their super fund.

Yes.

To say nothing of the IP that actually sits in that statement of advice that the financial advisor has developed.

All that being the case where I have landed on this, you'll laugh because, you know, I'm more interventionist than I, than I certainly I used to be.

I actually think the best thing would be is actually if APRA does come up with some sort of rule, the maximum you can take out of, and you've got to remember too, is that even if the maximum you can take out of super, let's say it's 20 grand, it doesn't stop the advisor charging whatever the hell they like for the advice.

It's just that the rest of it can't come out of super.

Yes.

So if you do have 3 million bucks in super, presumably you've probably got some money somewhere else as well.

Probably.

Just saying.

And you can.

If the total advice fees are 50, well, you'll just have to find 30 from somewhere else.

And I think of all the things that platforms and financial advisors and industry funds are grappling with at the moment, someone just deciding some kind of arbitrary line in the sand on this is actually probably the easiest way to get a decent outcome for everyone.

So we can all move on and get back to trying to get people to have good retirements.

Yeah.

Because it just becomes such a fiddly, nuanced, you know, in what circumstances is this amount of money okay?

And while it probably is okay legally and various other, you know, ethical and 65 other things, does it pass the front of the newspaper test?

And the answer to some huge advice fee is probably no.

And it probably doesn't matter how rich the person is who's paying it, but it coming out of super when it's supposed to be retirement savings, yada, yada, yada, yada.

And I can imagine a superannuation trustee saying we're not sure those fees are justified because they never knew that member had complex family health issues, multiple investment properties and Powerball winning and, you know, four careers and lots of other.

They might have other accounts with other super funds as well.

So on the face of it, you know, that member's got a small balance, a couple hundred thousand dollars, and they want to pay 50 grand for advice.

Well, who's to say that that's not a very complex financial situation and that fee is reasonable or unreasonable to a trustee who's got a limited view of that member's entire picture?

I think you're putting advisors and trustees both in very difficult spots.

Let's make the test simpler.

Yeah.

Are they a registered financial advisor?

Only on the list.

Have they got any strikes from ASIC or Upper or anybody else?

Nope.

All good.

Yeah.

And maybe setting a financial limit in terms of percentage of assets from this super fund.

You can only pay 1% of your balance or whatever.

The rest of the money you'll have to get from another super account or outside super.

Yep.

One of the interesting things too is the last thing that you want is financial advisors or anyone else playing arbitrage between especially if they do turn out to be.

You know, if some advisor does turn out to be dodgy, you do not want them playing arbitrage but working out which super fund to put all the MEM all their customers into so that they can create merry hell in one place anyway.

And what else have we got?

We have lots of conferences coming up.

Yes.

So many conferences and you and I are doing a session together which is heaps of fun with Susan Bell who is a researcher who does a lot of research into retirees and the three of us are doing a session on member segmentation and personalization which I'm thoroughly looking forward to.

I'm going to be collecting examples of poor member segmentation and poor communication.

I just received one today from a super fund saying come along to our women in super, you know webinar.

Do you have a gender flag on my.

What was the giveaway that your name's Neil?

Yeah.

My kids still get invited to pre retiree seminars so the communication could just be so much more targeted even with the most basic things of gender, age stuff that super fun should really know.

So this is going to be a lively panel discussion knowing your members segmentation data and the move to personalized engagement.

This is at Engage 2026.

It's being held in 14 days time the 27th to 28th of October in Melbourne.

I'm really excited about this one Sarah because IBR events you and I have been to quite a few of their forums.

This is the first one I've been to in Melbourne which a lot of member engagement teams based in Melbourne.

So we will include a link in the show notes.

Get yourselves along.

We will do our best to get you a listener discount.

Yes, absolutely yes.

Hit us up if you if you want to come along.

And this is back to back with another event run by ibr more for the technical audience.

It's the Fund Tech Conference which is on the same week in Melbourne.

So those two conferences are running back to back.

So yes.

And the week before being next week there is the Post Retirement conference here in Sydney which I will be attending.

I'M not presenting anything this time, so I'll just be the peanut gallery with the questions, which I'm looking forward to, actually.

I think it's.

It should be a really interesting conference and I'm sure we'll get some good ideas to then talk about when we catch up.

And then Thursday next week is the FSC Retirement Conference as well, which is always a monster.

And this year there's even a galah in the evening.

Flaming galah.

There'll be a flaming galah.

And it's a crown.

And we looked up this morning.

If you want to, you can, you could stay at the Crown for only $760.

It's a discount.

Neil, don't look like that.

No, it's.

Yeah, okay.

Chandler's budget's not quite there yet.

Yeah, neither's ours.

There's another big event taking place the 12th of November.

This is the Super Review Annual Super Fund of the Year Awards.

Sarah, I think you've got a small hand in this.

Tell us about your involvement.

Yes, judging.

I do like being a judge because I'm very judging at Judgy Pants, even though I'm told I shouldn't be.

But anyway, I am.

I try hard not to, but doesn't work.

But in this case it's been put to good use.

And yeah, I've judged, I've been a judge for a number of these awards for a number of years now.

So Fund Manager of the Year, Super Fund of the Year and Women in Finance.

I just, just reviewed some, some submissions last week actually for Women in Finance Finance and they're really great, actually.

It's really fantastic to get an inside, a bit of insight into some of the great things people are doing that where people are trying to make a difference and think about things differently and have some new ideas which as we all know, getting change in super is like swimming through treacle.

But it's.

This doesn't stop anyone trying.

Well, I'm sure it stops some people trying.

It's not stopping these people trying.

And there's always lots of people coming up with new and interesting ideas and trying to do things differently.

And it's a lot of fun.

It's a great way to give back to the industry, I think, is to actually put some effort into seeing what's coming up and through and the new ideas people are coming up with.

I normally look at things like innovation, marketing and thought leadership.

Other areas that I, that I judge.

I noticed one of the industry Thought Leader of the Year finalists is Kerry Vogel from CBUS super who joined us on the show a few weeks ago.

So indeed, good luck, Carrie.

I'm sure the rest of the contenders are very worthy as well.

Maybe they should come onto the podcast and share some of their thought leadership with us.

Yes, yes.

We'd love them to get in touch.

So best luck to all the finalists in that event.

I think that's all we've got time for today, Sarah.

I think it is too action packed.

Couple of weeks and look forward to inviting everybody back.

Make sure you follow that super show page on LinkedIn where we'll post this episode and you can always leave us a comment or review there.

Yes.

And we'll see you at some of our upcoming events.

We will.

And we have some interesting episodes coming up as well.

We're going to be talking about Operation Honeybee, which is the joint cyber war games initiative across the industry.

We have a special guest speaker coming on to talk about that, which I'm very much looking forward to.

And Payday.

Super.

How do those two things go together?

You'll have to listen in to find out.

Thanks.

Cliffhanger, Sarah.

We'll leave it there.

Thank you.

Thanks, Neil.

See you soon.

Thanks for listening to that super show.

We hope today's episode gave you something useful to take back to your team.

If you're thinking we should talk, we'd love to chat.

You can book a meeting with either of us via the link in the show notes.

And don't forget to follow the show, share it with a colleague and drop us a line if there's a topic you want us to tackle.

Catch you next time on that super show.