Hi, it's Sarah Penn and you've tuned in to that Super Show.

We question if partnerships really benefit members.

We riff on AI tricks from art to westpac.

APRA tries to slow the hype.

And yes, Trump wants to outdo Aussie Super.

Buckle up.

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

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 land.

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 it.

Good afternoon, Sarah, how's it going?

Hello, Neil.

I am very well, how are you?

Can't believe it's the beginning of May already.

We just had a labour weekend here in Queensland, so it was awesome to get a nice long weekend.

I think you had the ANZAC holiday, so.

We did have the ANZAC holiday.

The weekend just gone was only two days though, which was upsetting, frankly.

Well, let's see what we can do about a four day week.

That seems much more sensible.

Yeah, I like the idea.

I just don't know how we'd explain to clients that.

I'm terribly sorry, but my flower doesn't work Fridays.

We're too busy podcasting.

Yeah, that's right.

Having a lovely time.

We're podcasting and then we're at the pub.

Well, despite us taking each taking a day off, having a long weekend, there's been plenty of things happening in the superannuation sector.

I want to just start with the first one, which is a follow up in the Australian Financial Review showing a discussion topic we've talked about before, which is the inflows and outflows between Industry super and some of the Retail super funds and platforms.

There's some great animations based on APRA data.

I think core data produced the illustration just showing over the last couple of years how the outflows from industry funds have benefited retail funds to the tune of about $4.3 billion.

Most interestingly was a little quote from, I think it was from Netwealth, maybe Hub24, saying they're in discussions with some of the industry funds and they'd be happy to partner with them.

What do you reckon about partnership between industry funds and platforms?

I think if I'm a platform, that sounds great.

If I'm an industry fund, though, well, look, it might sound good to the industry fund executive or board maybe, but I just, I just, I don't get it.

I don't, I don't see what's in it for members of the industry fund because I mean, anyone can leave at any time, right?

So, you know, you decide you don't want to be an industry fund or you go and see a financial planner and they say, actually Neil, my dear boy, I believe Netwealth is the best place for your super.

Then you're going to go to netwealth.

So I don't see how partnering with them.

I mean, maybe this is just the new version of Dio, the direct investment options that have been around for a while, which don't have very much money in them at all.

A little bit of mine, well, most of mine in a direct investment.

I know, I know you are one of the few interested and unusual people.

I get that a lot.

Mind you, I say that it's a long time since I've seen any stats of how much take up there has actually been of Dio options.

I believe it's still to be small, but I might completely have the wrong end of the stick.

Maybe they're very, very popular, but I sort of feel like this is the next iteration of that in a way.

Yeah, that's a really interesting take on it.

And that could, there could be something in that perhaps, who knows?

It sounds like these discussions, even if they're very brief or happening behind the scenes and we're never going to find out until something's announced.

But yeah, this is very true.

But we can speculate wildly and that's.

What we're doing the whole podcast.

Throat.

Yes, as it says in the article, until the last two years, the flow of rollovers consistently favored industry funds and how the worm has turned.

Yeah, it's not the case at all anymore.

Hubby's absolutely smashing it out of the ballpark.

Well, one of the positive signs I took away from this is the Australian public seem to be resuming their faith in financial advice because, you know, for a few years there before and after the royal commission, it wasn't really a safe space.

So it seems like, you know, pre retirees are flocking back to seeking professional advice and, you know, this is the result.

But the fact that they're taking that advice is a good sign, I think.

Oh, I think it is too.

I think good financial advice makes a hell of a difference.

We were lucky enough to have some excellent financial advice early in the piece and it meant that we were in a much better financial position than we would be otherwise.

Significantly better.

Yeah.

Yeah.

So I'm very pro financial advice, good financial advice.

Just to put the caveat around that, because I have seen a few shockers, but it's just, it's upsetting that the shockers detract from most advisors who are working very hard to be the right thing by their client.

What have we got next?

I had the pleasure of attending the Microsoft AI tour in Sydney about a week ago and I sat in a really interesting session first thing in the morning, which is the financial services session.

And we had some interesting news there from really some of the financial services organizations in Australia who are reasonably early adopters of AI.

So we had Simone Burnett, who is ART's chief member officer and a couple of really simple use cases for superannuation funds.

Nothing earth shattering, but this has moved beyond a pilot and actually into production, which is, you know, no small feat.

So you might enjoy this one.

ART claim that they are using AI to check the reading level of all the member communications that they send out.

So all the emails and letters that they send to members are being assessed for the reading level and they're aiming to.

I do like that a lot.

I'm wondering what your advice would be about the target grade level of your communications to members.

ART are targeting a grade 7 reading level.

It's right in your wheelhouse.

Sarah, what do, what do you recommend?

Do you think I act like a 12 year old?

Because I probably do.

Look, I did do some very interesting research years ago.

Probably couldn't find it again.

But it said that when people are reading stuff that they're not interested in, they find it hard to comprehend.

But actually when you, when you are interested in a topic, you can take in a lot more at a higher level than you would otherwise be able to because your brain basically focuses in on it and really wants to learn.

So I don't know if grade seven is.

Oh, oh, can I make Queensland joke?

Do you want to hear my Queensland joke about beer?

Said he was just about to win the state of origin again.

Why is Forex called Forex?

Go on.

Because Queenslanders can't smell beer.

So I mean, sorry everyone, it's probably half our listenerships just disappeared and Neil's never talking to me again.

But maybe, maybe a grade 7 is appropriate in the sunny state of Queensland, the smart state.

Well, that's where most of the ART members are.

That's why I'm in Queensland.

I don't know.

I don't know, 12 or 13 is probably a bit on the low side, I reckon.

But anyway, it can't hurt, can it?

Putting everything through that and improving readability and making sure that the average punter, whatever grade you think they are, can understand things can only be a good thing.

Art is also transcribing all of their meeting notes that members have with financial advisors, just to save the advisors some time, make sure that those notes are recorded accurately and any actions are identified and followed up.

Which is a pretty, pretty simple use case for AI note checking.

We do that now.

I'm just about to write to our head of IT security and ask him to turn on automatic teams recording for everybody as well so we don't miss anything.

Yes, yes, we use Fathom.

It's great.

It records them, it records the meeting, it gives you a summary, it gives you all the action items and a full transcript and it's all neatly typed up.

And yes, it's saved us a huge amount of time.

And if it, yeah, I'm all for it.

And we had webpack who said that they were empowering their frontline teams with AI tools and that was actually having a bigger impact than doing some of the stuff in the back Office.

And westpac, I think, are also one of the largest rollouts of Microsoft Copilot in Financial Services.

35,000 People all have access to Microsoft Copilot, which Microsoft loves to wheel out those customers who've just adopted Copilot across the board.

Everybody should do this.

I'm not quite so sure, but.

Well, it's a bit like saying everyone in Excel uses macros.

It's like, no, no, it's turned on.

Like it's available in everyone's Excel.

Well, I don't know if it is, but, you know, everyone's using the italics button.

Are they?

I don't know.

And we had Hanesh, the CIO at tal, talking about their rollout.

They took an approach where they rolled out some AI tools to their leadership first, along with some coaching, really, just to demonstrate that kind of adoption so that the leadership knew what they were talking about whenever they were encouraging their team to adopt AI tools, which I thought was a fun way to do it.

They've had 37,000 conversations with a claims chatbot and I don't know whether those are internal conversations with claims managers chatting with an internal tool or whether it's the insured folks chatting with claims Chatbot on their website.

And they're two fascinating ones.

They're using document intelligence to support claims related document analysis, which Makes a lot of sense.

There's a lot of documents and claims.

Yes.

And then they started doing real time voice analysis, which are calling voice intelligence to detect signals during phone calls.

And he didn't elaborate on what those signals are, but I wonder if it's some kind of fraud detection.

Oh yes, it might be people with.

Stress in their voice whenever they're trying to make a claim.

Yes.

Look, I do think using AI overlays on phone calls to help customer service agents or salespeople or whoever do a better job is, is a really valuable thing.

Actually, funnily enough, the system that we use, Fathom, if you've got it turned on, it does this monologue detector.

And if anyone who knows me knows that I'm somewhat prone to a monologue.

But if you, if you talk for 90 seconds with no interruption, it turns red.

And I think a minute it goes yellow and at 90 seconds it goes.

They have a version of Fathom for podcast hosts.

It's just all red.

But I think, I do think there's some really interesting, really interesting work that can be done there around people in financial distress looking for signs of financial abuse or domestic violence.

Yeah.

Which can, which can be done.

That can really help, in all seriousness, deliver much better service and support frontline agents who are, at the end of the day, people to be able to do a better job and support the people that they're talking to and to be able to.

One of the things I find with having it actually do, the take the notes and action items is it does allow you to stay in the moment a lot more so you can really listen to the person and what they're saying.

And you're not worried about trying to make sure you've got every detail because you can go back and check it online afterwards.

So I do think there's definitely something to be said for that sort of AI augmentation capability.

Yes, I have.

Is it tal?

Maybe we can, maybe we can find out from TAL if the signals are for fraud or for, you know, people in distress.

Well, I thought this Microsoft AI tour event was very exciting, very uplifting, energizing.

And then APRA publishes a letter about a week later pouring cold water on the whole thing.

APRA has called for a step change in how banks, insurers and superannuation trustees all manage AI related risks.

And they go on to list a number of points.

Like they've noticed.

AI adoption is accelerating, becoming embedded in customer facing applications.

However, the governance arrangements haven't matured at the same PA that trustees for example, haven't got enough education or experience in AI adoption and boards may lack some of the technical literacy that is required.

There's concentration risk.

Relying all AI use cases on the same kind of model, for example, could put you at either a pricing or some kind of availability risk.

So yeah, APRA is saying not so fast.

I think everyone is permanently in a state of panic about all this stuff already.

I think APRA is just putting fuel on the, fuel on the fire.

And I do, I do think the request for a step change, I think asking for a step change when you're in the middle of the start of, you know, the next industrial revolution and expecting some kind of step change in governance around it is just, it's so unrealistic.

Like it doesn't, well, like, yeah, I've got nothing.

We have CPS 230, we have 234.

You know, there's a number of regulations already in place and if, if everybody was following those regulations, I don't think there's anything additional required just because it's AI.

I don't either.

Just a little shot across the bars from one of our favorite regulators.

Onto something even more.

You know, as I said to you before, when I read this, my eyes rolled back so far it was lucky I was sitting down or I would have fallen.

Ivaps, can you, can you do an.

Impression to expand Biden save his.

I was falling on the floor.

Trump is Trump's retirement or pension is going to be better than Australia.

I can't even do a Trump impersonation.

I would.

You have to imagine one here.

A really, really terrible one.

Just going to be.

So Joe Biden introduced this idea where US workers on very low incomes would have $1,000 contribution from the US government into some kind of personal retirement account.

Probably an IRA I think is the personal retirement accounts rather than the employer sponsored plans over there.

And Donald Trump's going to do one better and pick up the investment.

But he's also said there's a couple of little glitches in the Australian superannuation system that we'll get rid of as we copy the Aussie system.

So.

Oh kill me.

Oh, the online marketplace that he, that he's.

The executive order that he signed is going to be going to be built.

Whatever is called Trumpira.gov yeah, whenever I.

Grew up in Northern Ireland, the IRA was something completely different.

Yeah, that IRA.

Yes.

Oh my goodness.

So we'll watch with bated breath as the US system improves upon this trillion superannuation system.

But I Would have thought that the US President has enough to contend with right now, but no,.

Well, I mean just anything.

He is the best at everything in the whole world.

That's true.

Everything he's ever turned his hand to.

He has done an amazing job that no one else would ever be able to do anything.

Anything like.

Yep.

So yeah, I can't even.

All right, well, let's talk about something.

Sensible closer to home.

We have 2 billion reasons to fix retirement income.

Why is this one otherwise?

Sarah?

Yes.

So Nick Khalil and David Knox.

Hey, David.

Have put out a paper and a first linked article which has quite the comment section I might add, suggesting that once you hit a certain age your super should just be automatically transferred into.

Into drawdown.

And you know what I agree, and they've, they've actually said in this, which I think is very conservative, is that it wouldn't be until the age of 75 that you're.

That you're.

Yeah, exactly.

That any balance that you still had in a Kuhn would have to be transferred into pension and an income stream commence.

So we talked, they say all funds, including smsf.

I think.

Excellent.

I think this is a great idea.

Money, the money super money is not to bloody for rich people to hoard to hand on to their kids.

It is supposed to be for your retirement.

We talked about the members at Hester, for example, the benefit they get if they all switched from accumulation to pension at the earliest opportunity or the day they turned 65.

And that that would make have a far more meaningful impact on them than almost anything has to do during that person's accumulation lifetime.

So 75 just seems quite late.

That's 10 years.

You could be stuck or not have switched an accumulation into a pension account and lost or paid all that additional tax.

That seems like a long time to me.

It does seem like a long time, but I like it because it's far enough, it's old enough that it's quite hard to argue with and then over time you could gradually reduce that down.

But I do like the idea because I do think essentially that you shouldn't die with.

Especially if you died at like ripe old age of 90 or something.

That point you shouldn't be dying with tons of money still in your super.

Doesn't mean you can't have tons of money, which is always somehow when we talk about making people take the money out of super, it always sort of brings up this idea that somehow the money's been taken away from them entirely, which is not true.

You can Go into a bank account or whatever else you want to do with it.

It just needs to be taken out of the tax advantaged environment.

That is super.

Yeah.

And then.

Yes, but of course the comments is the best, the best part of it all this got 34 likes.

Why is it that a lot of people are obsessed about and with other people's money, how much they have, etc.

It's none of their business if I leave my super in accumulation, go and find a hobby and don't tell other people what to do with their money.

Okay, so we had at least one libertarian reading the, reading the article and that's fine except we're giving you a huge tax dodge.

No, but yeah, it's a tax concession while you.

Sorry, it's not.

We're taxing you while you keep it in accumulation.

I guess so.

Yeah, yeah, yeah.

But the thing is the reason that people don't put it into pension is because once it's in pension, part of it starts coming out, out of the super system entirely and then you lose the tax benefits of the.

Yeah.

Of the super system.

And the other thing is, which I do think is an issue that needs to be overcome and this would potentially help it is a lot of people end up leaving their money in a queue because they've been given incorrect advice, guidance, scuttlebutt, whatever from their mates, that it's actually better to leave your money in a cube.

And that's not always the case by any stretch.

And so not getting advice and just leaving it in a cube is, is a, not, not a great idea and we really don't want people to be doing that.

So I like, I quite like the idea.

I mean maybe you start with, even later, maybe you start with 85, you.

Could do it and then.

Yeah, like you said, if it's working well and then you can gradually bring it down.

Yeah, yeah, but I, yeah, but I like the idea of doing something that forces the money out of the super system, basically.

Well, I'd love to hear what other people think.

So if they want to write in or leave us a voicemail, visit thatsuper show and you can leave a quick recording or send us a message and let us know what you think, whether we should have mandatory, what do they call it, a my income concept where we convert your accumulation account into a pension account automatically.

Yeah, I'm not so fussed about the whole my income and all the other crazy things they've come up with, which is very interesting and I'm sure I'm sure.

We could get David to come and have a chat to us about all these good ideas.

He likes to talk possibly as much as I do, but yeah, at some point whatever you've got left, it has to be put into a pension.

I think it's a great idea.

Love it.

What else do you have, Sarah?

Well, the Telstra super is.

The Telstra super is no more.

They officially merged into aware super on 30 April.

A couple of days ago when we're filming this, that's one of the last big corporate funds gone.

I remember when I started in super and platforms and what have you, 25 years ago there were hundreds and hundreds and hundreds of corporate super funds and now we are down to a handful.

That's.

That's been one of them.

It's a bit sad in a way.

Telstra super, we're doing some really interesting things in things like AI and customer service and a bunch of other things.

I hope that.

I hope that Aware takes on some of those good ideas and brings them into the Aware fold.

Yeah, I got that impression too.

I think there was a great team at Telstra super and they were just the right size to run lots of interesting experiments and maybe didn't have some of the constraints that other funds have and we were able to act in a very nimble way.

That was the impression I got.

So congratulations to everybody who's been working hard behind the scenes to make that happen and to all of our folks at Telstra Super.

Hope you've all landed plum new jobs either at Wire super or elsewhere.

And yes, or taking.

Taking some well deserved, well deserved time out.

It is, it is an interesting thing though with these mergers because we're now at the point where the very large super fund it is simply not in their members best interest to take on the tiny funds.

And Telstra is not a tiny fund.

Telstra is sort of in the middle bucket.

But there are still quite a number of tiny industry super funds that have a couple of thousand members and maybe a couple of bills and they.

It's not in aware Aussie host whoever's best interests of their members to take on more tiny funds anymore.

Why is that?

Just because the work involved is a distraction from the operation.

Like if you've got a million members or you're Aussie and you've got 3 million members, what is the benefit to one of those 3 million members to take on 2,000 members from somewhere?

It's just can't really.

It's economist scale, can you?

Yeah, no.

London There isn't any.

So I think that's a really interesting, interesting conundrum.

And then you know, what does that mean for these smaller funds?

I had sort of thought in my head that maybe over time someone like ETSL would actually become the external trustee for some of the smaller industry funds that have really specialized client bases which are.

And which are.

And the work that is very much appreciated by their, their particular client base.

But of course ETSL is currently reviewing it's, it's super part of its business and yeah.

So I don't know, mind you, there's a new super trustee called STA which is some ex ASIC and EPRA people.

I believe we're going to do magic things.

So we look forward to seeing what, seeing what they do.

But maybe that's some of these smaller funds.

It would be in their best interest to sort of get together and have their own sort of industry version of an external super trustee for some small funds where they club together for some of the back end stuff and still operate independently.

So the things that matter for their particular member base.

That has been a special license condition imposed on Fiducian talking about know smaller funds and some of the challenges being a trustee and running a small super fund.

Veducion's got about 10,000 member accounts and $3 billion in thumb and APRA has asked them to keep an eye on some of their license conditions and undertake some reviews.

Yes, I mean additional license conditions.

I think what that really means is APRA comes and spends a lot of quality time with you.

Yeah.

So you can't go to lunch break without an APRA representative sitting at your table.

I've never been through, been through one but I expect it must feel a bit like being a teenager again and having your parents tailing after you the whole time.

Have you done your homework?

Why are you watching television?

Yes.

Appraisals also been making some, what do you call it, fine tuning to this CPS230 which is the operational risk management standard.

Did you get into the detail of what's happening in there?

I fell asleep.

Say no.

So this is about the material service provider register template.

So I guess this is for those funds who have got large material service providers.

Maybe it's a third party administrator or somebody else providing a lot of services, material services on their behalf.

Updates to CPS230 and CPT230 which kick off on 1st of July as well.

Yeah, yeah.

Look, CPS230 has been coming for a long time and it is very important in terms of the operational uplift that's expected.

A lot of it really came into the spotlight, I guess, when all the stuff with the insurance claims and everything happened in that there was a bit of some funds.

One speculating wildly here kind of pointed to the administrator, oh, well, it's not our fault, apra, it's the administrator's fault.

And apra's view was, no, mate, you're the trustee.

It has to ultimately sit with you.

And if you're not on top of what those service providers are doing, well, that's on you and you need to be on top of it because they're your members and you have to look after them properly.

So I'm all for all that part of it.

When it gets into the micro detail, I'm not so good.

I'm more of a big picture thinker.

Neil.

Oh yeah, I feel it.

This is the concepts and ideas podcast.

That's right.

I'm not sure, but it has finally been settled and they've been working on it for years, so I guess that's a thing.

Well done.

Awesome.

Good work.

All right, Sarah, I think that's all we got time for in this episode.

It's been another.

Indeed it is.

Yes, lovely to talk to you, Neil.

And yes, if you'd like to come on the episode, on the episode, if you'd like to come on the podcast as a guest or you know someone who'd be an amazing guest, please do get in touch or send us a note and let us know who they are.

And if, as Neil said earlier, if you'd like to leave us some feedback, you can do that on voicemail or send us a note and yeah, keep the conversation going.

Thanks, Sarah.

See you next time.

Bye for now.

See you soon.

Bye.

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