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 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.

G', day, Sarah. Welcome back to another episode of that Super Show. How are you doing?

Hello, Neil. I'm very well. How are things with you? I hear you have news.

Yeah, so since we last recorded, my startup, Novagentic has been acquired by Chandler cx.

Yeah. Congratulations.

Thank you very much. I'm delighted to have joined Chandler as their new. What do they call it? Global Chief Product Officer.I'm going to need a widescreen business card for that one. It's, yeah, fantastic new role. Really thrilled with the team so far, Chandler. It's week three, two or three, I think, and awesome people.A great product for customer communications, really, for regulated organizations. Long history in print, but probably 15 years. Delivering digital columns now as well.So lots of great superannuation funds as customers and others in the financial services and public sectors as well. So, yeah, really exciting. It's fantastic news.

Oh, fantastic. That is excellent.Speaking of doing new and exciting things, a number of Australian super execs were in the US last week at the Superannuation Investment Summit. And the fact it was called the superannuation and not pension Investment Summit makes me think maybe the Australians organised it.

It was. Yeah, so we had Ambassador Rudd and a number of other important Australians in America organized this summit.And I think it was a combination of let's bring over the superannuation funds, show them how they can invest in the us. Funny enough, one of the US delegates from the White House welcomed the luminaries from our superannuation sector and said, welcome.I want to tell you how fabulous it is to invest in America. Just don't ask about the tariffs. No tariff talk, please, at all.It kind of reminded me of that old Faulty Towers episode, you know, don't mention the war.

Yeah, well, don't mention that either, I assume.

Yeah, exactly. But yeah, it's great to see a lot of CEOs and chief investment officers visiting the US.I think there was a whirlwind tour, New York, Silicon Valley to meet some of the officials in the us. So, yeah, a worthwhile trip I hope.

Yeah. So my first question is, why don't I get invited to go on whirlwind tours of the us?Although frankly at the moment, owing to my somewhat gritty lefty social media, they might not let me in at the front anyway. But yes, it is good to see expanding out further and doing more overseas.I mean, as we all know, the super system here is so absolutely bloody enormous now. Now we have to be looking globally for investments, but that's been the case for years now.But it's really, I guess it's at the point now where it needs to be more than just, yes, we'll all go individually and go and look for things overseas.

Yeah, these kind of organized roadshows can be great for Australia, great for the sector. And a number of the posts I've seen from people who were there, it's like they've just discovered AI, which is fantastic.Hopefully that means that they will bring back some of that spirit of innovation and artificial intelligence and productivity with them when they return to Australia.Because we all know that this sector, internally, when it comes to improving how we work, maybe hasn't been on the front foot when it comes to adopting things like AI.

Yes, yes, I think we're very good at super funds at investing in things like AI. Mind you, the super sector is generally better in investing things when they're a bit more established, not right at the startup stage.I gather quite a lot of funds to have copilot up and running, so that's definitely something. But I know there's still ones around that don't, which makes it very tricky.I was literally speaking to someone earlier today who was in the throes of doing a whole lot of policies and training around regulatory stuff, which would be so quick and easy to do in AI, but they're not allowed to use it, so it was taking them a long time to do it manually, which sounds very painful. Yeah, yeah. My attention span and interest in typing out long things like that is decreased even further than it already was, I have to say.

Interestingly, I thought there was a pretty critical review of a similar trip last year, I think by APRA or asic, who didn't consider that as a great use of operational expenses to go on what the regulators seem to think was a bit of a jolly to the us. However, this year we had the treasurer from New South Wales going on the trip as well. So the government's on board, the funds are all on board.So hopefully the regulator, you know, also thinks that it was good value for Money.

Well even if they don't, I presume they'll have to keep quiet and smile as one does occasionally.Look, I don't know, I like part of me thinks these things are an absolute junket but on the other hand it's much more efficient actually for the US companies to meet a whole lot of super companies at once. So in some ways while it looks like a complete wrought and I'm sure they had a lovely time, bloody hope they did.It is a much more efficient way to get in front of a whole, you know, when you've got many to many, many super funds and many investment ideas and things to put them in front of each other in one go.

So yeah, I'm sure even the time that the chief Execs and the CIOs spent with each other that alone with the, with the US delegates was worth it.

Oh yeah, yeah, yeah I'm sure. Yeah, I'm sure. I'm sure that works very hard in between fun meetings and dinners and all those things.Mind you, I don't know you about you but after a few days at a conference I'm ready for a, you know, some soup and toast. Not, not yet another dinner where you've got to go and smile and talk to people.Maybe it's not as much fun as I'm imagining but I still think it sounds pretty good.

I've got a five day trip coming up to the Microsoft headquarters next week. It's my annual pilgrimage today it's known as a Microsoft MVP summit.So the product teams at Microsoft unveil their roadmaps and their plans for the next 12 to 18 months.

Oh, fascinating critical feedback.

It's not a junket.It's a lot of hard work, a lot of intense sessions, a lot of gloves off behind closed doors kind of feedback but it's going to be tiring and I just keep my fingers crossed they let me in because I had to for the first time declare my social media profiles.

Oh yes indeed. Well I hope they do. And you'll have to give us a rundown when you come back of some of the more horizon three exciting things they've got planned.

Yeah, well it's all under non disclosure agreements. I can't divulge too much but I can probably hint how much AI there's going to be in our future.

Okay. But yes, well you can give us a level of excitement which will hopefully be high.Now how about we talk about there all the exciting things that are happening. There's some things that happening or coming to light that aren't so amazing.Oh yeah, you know, opportunities everywhere, Neil, as I like to say, yes, one.

Of them is identified a few.

So many opportunities. One of them is insurance. Interestingly not so much the, you know, not processing claims and things quick enough.ASFA has put out some information about what they call the insurance gap and they have calculated that since 2019 when Penthen PYS came in, that's protecting your super and putting members interests first for those of you not in the team since then. So in the Last sort of six years they estimate that about 11,000 people have missed out on TPD and about 5,000 people have died without death cover.Now what they're saying, and I haven't seen the details of this is a lot of those are blue collar workers under the age of 25 and I actually, I was chatting to some board members from one of the electricity.I think it was super some years ago actually when all this was being discussed and looked like it was going to be implemented, which it was and they were saying the thing is if you work in poles and wires, like if your job is getting up there and climbing around electric electrical wires, if you make it to the age of 25, you probably won't die afterwards. But the people who die on poles and wires are young because it's lack of experience.

Good lord.

Yeah. So it's actually really, it's pretty horrible to be honest.And the other thing is, and all the jokes around, you know, people in Canberra being so white collar they don't realise what's going on in the real world.But while the average age of having a first child in Australia might be, I think it's 32 or something, a lot of people still do have babies much earlier and a lot of people get married much earlier and there's an awful lot of blue collar workers who are under the age of 25 with a spouse and kids.So if they die at work or are injured and can't work anymore at work, it's not just them that's suffering, there's a whole group of people around them as well. It's really awful the whole thing about, yeah, how do we fix it?So the thing was you had to opt in under the age of 25 or if you had less than 6,000 bucks in your super, a lot of this insurance now is literally only a couple of dollars a week. So even with $6,000 it's not making a massive dent if that's all you've got in your super. So the real the question is now what do we do?And because we've had stapling in place for similar amount of time, actually there's a hell of a lot less people now who have lots of little super accounts with hardly any money in them.Between stapling and the ATO cleanup, we know all the funds having to clean up, small balances, inactive accounts, a lot of the older issues of people paying multiple lots of insurance and multiple lots of fees and things, that's all gone now.So since we've had all this cleanup, stapling, inactive accounts, PYs and PMF six years later, do we need to have another look at it and do something a bit different? And my personal view is for blue color workers, absolutely.

So I don't know if we can distinguish between different colored colors, light blue,.

Medium blue, or dark blue. And I kid you not, that is what some PDs say.

Maybe it's time we go back to an opt out model. Or we automatically opt you in once your balance hits 6,000 or once you reach 25. Whatever. Yeah.

Aspa's saying it should be once you reach 21.

Wow.

Which I don't know. I think that's not unreasonable actually. Especially because the premiums really are tiny and you know, something really bad happens.Your ability to earn income is your biggest asset.

That's right. It was a financial advisor who made it abundantly clear to me that when we were discussing income protection insurance.Yes, I wouldn't dream of driving around in a car without fully comprehensive car insurance. My car at the time was worth $7,000. My lifetime income could be millions of dollars if I'm in my 20s.My future income earning points is millions of dollars.

Millions and millions. Yeah.

People go to work every day without income protection insurance and on a $2 million asset.And yes, when you think about it like that, when it was made clear to me in those terms, like, wow, okay, I need some insurance for that thing to, you know, protect my family. Yeah. So yeah, I love this idea of opting people in automatically once they reach a certain balance or income and they can still opt out.But yeah, yeah, of course, to make a choice. And they have decided to opt out. Now the question is, do we opt them back in again and again every year or something? I don't know.Great nod, but maybe it's like a death benefit nomination that it's got a three year term and you opt out for three years and it'll automatically opt you back in unless you renew your opt out.

Like a negative binding death benefit. Nomination.

That's right.

Or at least we go back to you after a certain number of years and recheck again. This is one of the issues we have around not having the nudging laws and other things.That second tranche of advice laws is that at the moment, if someone's opted out and you go back to them and with a bit of a, you know, do you really want to. Do you want to rethink it? That would probably be considered personal advice. And then you're running afoul of a million other issues.Yeah, it's one of those things. And I think ASFA is actually right to call for a review at this point.You know, six years later, six, seven years later, actually, and time to look at what's been achieved.We certainly mess with other settings around tax and things far more frequently than every six or seven years, much as everyone whinges about it, but it is done to balance things up. So maybe we need to think about insurance in a. In a similar way.

Yeah, very good. I'm with you. Let's make it Sarah's regulation and we'll introduce that next year.

You know, I. The advice review was done by Michelle Levy and often known as a Levy review. And I've met her very, you know, bit fangirling, I've got to say.Okay, let's do one more negative and then we'll go back to something positive.

Well, okay. Well, our friends at AFCA have published their calendar year 2025 analysis of complaints. No surprises.Complaints have shot up over the last 12 months. A lot of this has got to do with the collapse of Shield and First Guardian.A lot of those cases are landing on AFCA's desk and they're doing a. I'm pretty sure they're working hard to clear that backlog. So we saw 58% increase in investment and advice complaints, including a 59% increase in complaints from SMSF.And over 2,000 of those relate to the collapse of Shield and First Guardian Master Fund.

Yep. Yeah.

Look for the people at AFCA trying to figure all that out.

Yes, Actually, I do think one of the interesting things in, in reading through the press release is actually that, that afka, it says AFCA reached a significant milestone when it issued its thousands, so 1000 Dixon determination.So Dixon is a investment slash, sort of SMSF crowd that fell over spectacularly, but I don't think your average punter actually knows much about that. SHIELD and First Guardian got a hell of a lot more coverage, but the Dixon thing was an absolute mess as well, maybe it's.And a lot of it was self managed super. Which I guess because they're all so fragmented, you don't have that sort of massive, you know, this platform owed this huge amount of money.So it's less, it's less obvious, but it's certainly an issue.And then if you look at the actual growth in smsf, number of new accounts being opened and you compare them, it's a bit of a concerning issue, I've got to say.

Well, I've also noticed a 29% rise in superannuation complaints. Sarah, what's going on? Wow. I thought we had this under control.The trend was down, I thought, from the previous year and then into 2024, 2025, we're back up again. 7,687 Complaints relating to superannuation, mostly driven by delays in handling claims and disputes over claim decisions.

Yes. I don't know.Well, like, part of me, if we do both sides of the argument, part of me says turning something like that around, claim handling times and what have you at a large super fund is like turning a massive ocean liner. It's very time consuming and difficult.

Yeah.

The other part of me says, are you for real?

Yes.All the ones I spoke to regarding complaints and claims was, yeah, we've got this under control, thanks for your interest, but we've hired some extra staff, we've cleared the backlog, Things are looking pretty rosy. Of course it was a bad situation. We want to do the right thing by our members, but I think we're all good. We've got it from here.And the complaint numbers just don't, don't,.

Don't line up, don't tally.

Yeah. So some, some work to continue to do there.

Yes. I mean, it'd be interesting to have a look at month on month or something.I might go and have a look to see whether it was like only first half of the year and it's fallen since then, but yeah, I don't know. I don't know.

I also noticed Heather Gray, who's the lead ombudsman for superannuation at afca, is stepping down. So Heather, join.

That's terrible. She's great.

She's great. So she was an awesome guest on episode five and Heather, the best. And yeah, you are, you know, a bit of a complaints maven.You know, a thing or two about superannuation. You listen to this show, then there's a role in Afka waiting for you.

Yes. Actually Afka recently hired a bunch more people. They've Put a bunch of stuff on to. To deal with all of this doobie dooby doo. Yes.But, yeah, Heather's. Heather has been an amazing advocate, I think, for people in super. And she's so calm and considered and very reasonable too.She doesn't go in any one particular direction. She's great at sort of staying in the middle but seeing all sides of things. So, yes, congratulations on your amazing career at afca. So.Well, that's a nice thing. Here we go. That's a nice thing to talk about, Sarah.

Bill Watson has had an amazing career as CEO of First Super. What's he done? Has he left? So Bill has stepped on, actually, our friend Greg Everett. You introduced me to Greg.He's the new acting CEO at First first super, so good luck, Greg. But Bill has given an interview with Financial Standard on his way out. Well, well, he's talking a bit of a clanger.

Yeah, it's a bit of a tell us what you really feel sort of interview. He says, I get the feeling we are letting our members down in terms of poor service. Well, Bill, mate, I don't think you're a CEO.

Yeah, he's not just referring to first Aid. Super. I think he's.

No, I think he's talking about the whole industry. Industry. He did. He did have a very. He had a couple of interesting points, which I've got to say he does. He does have some reasonable points.Sorry, Bill, if you. Only if you've pressed the I'm not listening to this rubbish anymore button already on your podcast player.But as he says, we've got to remember why funds were set up in the first place. And when they were set up, there was so much more personal service and there were people out on the road all the time.It was a really high touch model. Although, interestingly, I know that a lot of funds still have that very high touch model, even some of the bigger ones.So there is still a lot of that going on. And then he does go on to talk about.The focus is kind of gone away from the service side of things to focus on becoming really institutional fund managers. And I do actually think he's got a point there.And I do wonder if the performance test, maybe this is a sort of shadow side of the performance test, is it has really focused in on the investment side of things above all others. And I do think, you know, that combined with the best financial interest test and all the rest of it has made it a very much a numbers game.But there's just a lot more to it. Than that, especially when you retire, which, you know, ASIC and APRA and Retirement Income Covenant and whatever everyone's always banging on about.But there's a, there's, there's a lot to unpack there.

There is. I, I really appreciate, you know, Bill's candor in coming forward and saying this.It's going to throw hand grenade over his shoulder as he departs, but I think it's great. He's really shining a light on some of the challenges.The real dichotomy between are we here just to generate returns or are we here to look after members?And there's a lot of pressure to drive down fees, which means cutting back service quality and focusing on investment returns at the expense of everything else. And it's a tough spot to be in. I imagine he had a lot of trade off decisions to make as a.

CEO and while at the same time focusing on the Retirement Income Covenant and delivering all these new retirement products and working on advice and member communications and 59 other things.

That's right.

And that's why you and me are on the outside.

So if you're on the inside working hard to work your way through regulations and risk mitigations and member complaints and investment returns and performance measures, I feel for you. It's a tough spot. The good news is, Sarah, there's going to be an award for everybody.I've seen the Chant west nominations this year and there is a lot of lollipops being given out everybody for everything.

Well, we do like that. That's why at Mayflower we like to send people boxes of donuts either when things have gone really well or when things have gone really badly.

I'm going to lobby ChatWest to have a Podcast of the Year award. Oh, yes, it'll be between us. And actually, I have to tip my hat to Art, who've got a great podcast called Super Insider.I don't know if you've been listening to that one, Sarah, but. Oh, I haven't.

I'll check it out.

She's doing a great job shining a light on some of Art's investments that it makes on behalf of members. Things you wouldn't necessarily think about outside of, you know, US equities and Australian ASX 200.I've listened to some great episodes about their investment in Brisbane Airport from Brisbane Airport. So they went on site.

Excellent.

And you can hear the planes landing in the background. So Art's members own a significant chunk of that. And another recent one, which is a sector close to my heart, which is the buy to let sector.So they've.

Oh yeah.

I worked in the US on a big project for a company called American Homes for rent who owned 30,000 single family homes. They renovated them and then rented the buy.

Wow.

Institutional rental sector. Which we don't really have in Australia.

No, we don't at all.

Our rental sector is mum and dad investors investment properties. But Art is making big investments alongside Mirvac in these, you know, apartment blocks with 500 units that would be managed by Mirvac.So you get a real professional landlord and I imagine a very long term lease if that's what you want. Because you know, rental security is a massive topic for a lot of renters. So yeah, it's really interesting to see.I know the government was hoping that super funds would invest in this sector. So it's great to see Art shining a light on its investments in that sector through their podcast.

Yes. Well, maybe we can get someone from Art. I know a few people to come and talk about it. The process of how they've been able to make it work.Because that's the thing is it's bridging the gap between. Yes, massive issue around housing. Surely we can do something there. We've got tons of money we need to invest.It's a great long term investment and where we currently are. But they've been able to bridge that gap.

So I think it's a good example of educating your members through the medium of podcasting. Some of the other funds also have podcasts but they tend to be very market update driven.

Yeah, yeah.

The price of gold this week and yeah, you know, that suits a trader. Maybe if you're a day term superannuation fund member, maybe.But the vast majority of members, the stories that Art is sharing I think struck the right note for me.

Yes. Well, that's the thing. We don't want super fund members being day traders and futzing about with their money all the time.It's the worst thing you can do. All the stats show that people that invest their own money do worse than institutional investors.

That's right.

Often by just trading too much, actually. Yep, yep, yep.

So yeah, there's been quite a bit of angst about, you know, what should I do with my super right now? Should I invest more? Should I keep investing? Should I switch it all to cash? Yeah, super has been down 5% this year.The analogy I like to make is I have a. I might have admitted this in public before. I have a bit of a soft spot for Red Rock Deli Salt and vinegar chips.They're $6 a bag in the supermarket but sometimes they're on sale for like $3 a pack. And when they are, I buy two.And when you go on sale, I don't go into my stash of Red Rock deli chips in the cupboard and bring them back in and ask for a refund. That would be crazy. So it's the same whenever the stock market goes down and that's what everyone does.

I know, it's crazy, isn't it?

I buy more. I don't ask for a refund on the stuff I bought last year or so. Yeah, steady, steady as she goes.Keep your head down, keep investing, keep your superannuation guarantee contributions piling in. Don't switch. Most of us have got a very long way to go to retirement. If you're 10 years out, have a plan.If you're five years out, put the plan into action. Yeah, steady she goes.

Have you got a date when you think you're going to retire?

I have a, I have an amount of money that I would like to. And then.

So it's the pile of cash approach.

Yeah, that pile of cash number. Then I think I can, I can retire. So yeah, there's probably a date. I think it's probably slightly more than five years away. Hopefully less than 10.Yeah, yeah, yeah, that's, that's my approach. How about you? Have you got a date in mind or a number in mind? What's your approach?

I think I'd go nuts if I wasn't working well or I drive everyone around me nuts or both.

I don't think I'll step out of work altogether. I'll need to do something. But you know, I could, I could become a, I could become a non exec director.I could go and take my Gai CD and become a director or an advisor to startups. I could, you know, become a teacher, do some other third career kind of after I quit work. But yeah, it's fun to think about.

It is fun to think about more travel. That's my plan.

Okay, well, speaking of fun things to think about and more travel, let's catch up again whenever I get back from the US in a couple weeks.

Yes, I want to hear all about it. Well, even if you can't tell us anything about Microsoft, you can at least tell us all the things about.Do they still have the ridiculously enormous food buffets and free smoothies and all those things? What's going on in the U.S. do you even get there? That'll be the question. Number one.

I'm really excited because the Aussie dollar will buy you 72 US at the moment. Used to be about 60 last year when I went so that was painful. $12 For a cup of coffee and all that.

So. So shopping here we come. Is that the plan?

A little bit of shopping? I might be looking for a coffee a little bit. We'll catch up when I get back Sarah and see you there.

Excellent. Sounds great. See you soon.

Neil, 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 could book a meeting with either of us. We via the link in the show.

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Catch you next time on that super show.