Welcome to that super show, the podcast where we talk all things super from the inside. I'm Neil Benson, CEO of Superware.

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, hello Neil and welcome to 2026.

Happy New Year.

And you. Did you have a good break?

I had a great break, thank you. A couple of weeks off, a few trips away at the beginning of December, but we were around Brisbane for the main holiday and lots of DIY renovations.Daily trips to Bunnings, who thank goodness only close their doors once or twice a year.

I'm sad to say we didn't do any renovations here.We're, we're trying to get quotes to do renovations but we're struggling to find a builder so we just went away to other places instead and we're not at home very much at all, which worked nicely.

I took a two hour course in how to sand a floor. The course is called how to sand a floor.There's been lots happening in this in the super sector, even despite, you know, a lot of people being on summer holidays.

I know.

Always a good time to launch a hand grenade over the parapet.

Yeah. What's been happening?

Well, why don't we start with Misha Schubert from Super Members Council pulling the pin on the hand grenade about the compensation scheme of last resort and suggesting that the 650,000 SMSFs should be coughing up for CSLR rather than quote low income industry fund members, most of whom never receive any financial advice. Neil, what do we think?

I think she's on to something.If I think about the Shield and First Guardian debacles, almost everybody involved in that was heavily handedly persuaded to roll over from an industry fund or retail fund into an smsf. They took bad advice and they lost a lot of money and they deserve compensation.But most regular members of most APRA regulated super funds are never going to make a claim for compensation because advice or there's another provision for bad credit, bad lending and something to do with security stealing. Those are the three pillars of the compensation scheme of last resort and most fund members will never touch those.

So yeah, yeah, it's interesting, isn't it? I mean, if you compare it to the, the Australian super investment in.I can't remember what they were called, but they managed to lose a billion dollars. But because it was one of the 350 billion that they have, it was just covered as part of their normal cost of doing business.And they weren't going, you know, going to anyone asking for the money back. It was just part of what they did versus these people who've, you know, individuals who've lost their entire super, super balance.

That was the Australian super. Write down on their investment in Pluralsight, which was a training company.And, you know, that's just a regular private equity deal that just didn't work out as expected. I'm sure there's private equity and a couple of deals that work out, you know, 3x5x10x. Oh, yeah, yeah, they're pretty happy.

That's exactly right. Rumor has it that SHIELD and First Guardian did approach industry super funds. There you go. There's a rumor who declined the opportunity.

To invest in their.

Yep. Yeah. And when that didn't work, they, they moved to a different marketing approach. Allegedly. Rumor has it. Allegedly.

Is that common for APR regulated funds to invest into managed investment schemes? I guess they invest in.

Yeah, they do, yeah, yeah, yeah, they do, absolutely. Sometimes it's just easier to invest via a managed investment scheme. It sort of just depends on which.Which wrapper works best for the particular instance.But a lot of the time, if you're an industry fund and you're going to a fund manager and saying, I want to invest $100 million in XYZ portfolio, if they already have a managed investment scheme that's set up that does exactly what you want, then they might just give you a separate class so they can give you a lower fee.

Yeah.

And then, you know, off you go. Happy days. So, yeah, it does, it does happen.

Sounds like the chief investment officers and the chief risk officers were doing their jobs and not letting that.

Yes. Yeah.

Yeah.

Well, actually, I think it might have been sort of investment governance. I doubt it even got there. But yes, this is all wild conjecture. You didn't hear it from me, but it is.But it is that thing, though, of, you know, given all of that and given they didn't invest in it, you know, potentially, Ms. Schubert has a point around why is it that industry funds are being made to pay for. For issues in another part of the.

Sector for wild conjecture. That is the reason I download multiple episodes of that super show. So keep it coming.

That's right. Oh, no, I'm. I'm here for. I'm here for some wild conjecture.But yes, I don't Think she'll get anywhere but points for trying and I think she does have a point.

Yeah, well there's several other commentators also agree with her. So she's not alone in that. I think she's got a very fair point and that people who are covered by the insurance, as it were, should pay the premiums.That's the way that insurance works and CSR is just a kind of insurance scheme. So. Yeah, very fair point.She also wants every super investment option, not just the my super products and now it's been rolled out to all the optional investment products inside an Apple regulated fund, but every super investment option on every platform to face a performance test which would be a huge scale up of the performance test program.

Yes.Look on, on the one hand I can, I can see her point that it is people's retirement savings and it's not great that people can invest in rubbish options. Having said that, the cost of implementing that and the possible harm that you would mitigate through doing that don't really stack up.I don't think it's one of those. Yes. As a headline, I kind of agree with her, to be honest.I think it's, I do think it's problematic that as a, as a super fund member, your advisor or yourself or whoever can inadvertently put your money into something rubbish.Having said all of that, I mean ASIC is looking at how and you know, are suing some of the platforms for, or providers for not managing their investment governance effectively around SHIELD and First Guardian.So I think making sure that investment governance is up to snuff is a much better way of managing this issue rather than putting a performance test on every single investment option.

So I don't know if you've noticed but ASIC and APRA both seem reasonably busy right now. Go and do a performance test on every single investment option available.Even if you took a risk based approach to it, that's still hundreds and know of invest thousands.

It's thousands. Yeah, yeah, yeah.

So not sure that one's going to get through but we do have to. Yeah, you have to do something about the situation.In other news, a, a survey also by the SMC has revealed that younger SUPER members who are more educated about super are six times more likely to be engaged and take actions that lead to better retirement outcomes. Which I'm putting in the no Sherlock bucket 26.

You heard it here, first team.

Yeah. Is it. You made a great point about whether is this just correlation or causation? Yeah, yeah. Is it one of the.And we also have to remember that the people who answer these surveys tend to be more engaged with their super in the first place.

Absolutely. They might have been bribed with a $50 my voucher or something, or Apple voucher or whatever. The, the current thing is to attract the young people.But, but yes, I'm not sure. Education leads to engagement. I think a lot of the time engagement leads to education.But I guess, look, yes, it's a positive thing when people who are educated, they are more engaged and if they are more engaged, they are. They learn more about super. So that's good. But I would, I would like to see those numbers and perhaps we'll ask the SMC if they'll do it.I would like to see it cut against balance or income because what I would suspect is people who are earning more money are probably more interested in what's going on with their super. I know my, my husband was far more interested in his super earlier in the day than I was, even though we both worked.Well, I worked for a super company and he did not because he worked for a tertiary institution and he was getting 25% super.

Oh, I thought you were going to say 17. 25%.

Well, they put in 17 if you put in the eight.

Oh, right. Okay.

So, yeah, so 25% super. Yeah.

Oh, money bags over there. Wow. Good for him.

Well, I know. So that, that does improve one's engagement with super, I can tell you.

Yeah. The results from a amp survey last year showed that I think one in four people, 25% still have never engaged with their super fund.The super fund knows the member's name, probably their home address, tax file number, and that's about it.

Yeah, if their tax file number. Interestingly, some work I did many years ago when I was at Asgard back in the day.We found at the time that a lot of people who had Asgard accounts didn't even know, couldn't even tell you that the name of the company their super was with was Asgard because people got their super through their financial Planner. This is 20 years ago. So this is pre the days of super funds doing lots of public advertising and what have you.It's pre before, like compare the pair advertising. It's before all of that. And yeah, about 50% of people couldn't tell you who their super was with. In order to combat this, we.The next lot of statements we sent out had a huge picture of a person on the front and a big Asgard Wealth Solutions logo on it. And knowing who your super was with went up to close to 100.And we also got a whole lot of complaints because to basically summarize the complaint, I don't want people to know that I have a lot of money in my superannuation.

Oh, okay.

Yes. Oic darling. Terrible.

Well, I've. I've heard complaints recently.One member wanted to switch her super fund because she didn't like the big blue hairy monster that represented her super fund.

I like the big blue hairy monster.

It's, it's, you know.

Right.

I think it's an interesting campaign. I think it's doing. It's doing wonders for, for that particular fund.

Yeah.

But, yeah, it's not everybody's cup of tea.

No, no. I'd like to be honest.Most of the big ad campaigns and things I've been involved in, there have been a few have, have involved complaints one way or another, but it's a bit like. It's that thing of risk management. If you're.If your advertising campaign isn't interesting enough to upset at least one person out there, then it's probably not very good advertising because if you get, if you don't get any cut through, then like, if no one notices it, then what the hell is the point? Spending members money?

Yeah.

If no one ever complains about it. So, yeah.

Well, then maybe the Host plus sports sponsorship's a great thing because it's upset me no end. It seems to do wonders for their member acquisition goals. So.

Well, I mean, Host plus is top of mind as a result. Right. You're well aware of it.You do that advertising, that specific sort of advertising like outdoors, where you're not seeing anything besides a Host plus logo going round and round and round in circles. That is literally just to drive awareness.There is no other point for that advertising besides to drive awareness, which is to make people aware so that when you. And it's prompted awareness.So when you think I must do something about where my super is, Host plus pops into your brain like a magic or millions of dollars worth of outdoor advertising. Yeah.

Well, good. Good for them. It's obviously spent money more wisely than that, but there you go.

Well, I was working for them.

Yeah.

The cost per member is probably very low.

It probably is, but it's. It's in a $20 million, $25 million range. Like, that's not an insignificant amount of money. That's probably.

They've got about a million members, don't they? It's 20 bucks per member. There you go.

I bet they spent more on sports team sponsorship than they did on Technology, given some of the systems I have to log into, I think that's.

Oh, we should go and check. I'll go and check. You can see in their annual report it's a whole thing. In fact, funds are doing their annual members meetings at the moment.

I've been to a couple. Yes.

Done theirs or not.

It was back in December.

Yes.We help a number of funds do their annual members meetings which is always very interesting and I have learned quite a bit about the ins and outs of some of the smaller funds and some of the larger ones through doing those. Actually it's an interesting way to get a behind the scenes look on how the. What's happening and what's really important at the fund.

Well, as you know I'm a member of a couple of different funds, mostly for market research purposes and I got lots of invitations to annual member meetings and I asked them all similar kind of questions. I sent them a little barrage, three or four questions, all very similar. None of those questions got answered live in the meeting.

Well, there must have been good questions then.

Yeah, definitely. James talked about maybe answered later.

I know they have to be answered later. That's part of the legislation.

Oh, is that legislation?

Oh yeah, yeah. Every single question that's put to an annual member meeting must be answered either in the minutes or in follow up documentation on their website.

I need to go and check their follow up documentation.

Yeah, they have to put it on the website. I think it's within a month. But you can go and have a look at each website and download their answer and see which one you like.

The last bit of news I had here was back in third party administrator land which is. Is to acquire Mercer. Well, I was going to say Mercer's. Mercer super. Mercer's super admin business unit. So Mercer is part of a huge global empire.Have their own Mercer super retail fund which is pretty big. I think it's in the top 10 or top 20.

Yeah, yeah, it's huge. Yep.

And lots of.They run lots of corporate funds I think as well but they're, they're kind of back office certified administration service is being withdrawn from the market and Apex is set to jump in and acquire it subject to regulatory approval. What do you think of that one, Sarah?

My concern is that we've like if we go from having Link and Mercer to a couple of years later to having Link slash grow Apex slash slash Mercer and as you mentioned before, SS&C getting in the game and there are some other small ones I think, I think I was hoping that somehow through these changes we would end up with higher quality, more robust third party administration options. And now I'm really going to say dreadful things. I'm probably going to get in lots of trouble. So look forward to this one. Please complain.I do like it. One I think Link, you know, old clunky big systems and it's not any one person's fault. Right. This is just what happens over time.Old clunky link system, big link systems, they're buying, grow, which is new and blockchain and doing all this cool stuff.But when a large company buys a small company like that, the ability for that small company to continue to do all that magic stuff gets trampled to the ground very quickly in my experience. So that's one. And then on the other side we've got Apex who are new and still it's founder owned so not listed or anything.It's private business I think and they're off trying to do all kinds of new and interesting things. They're not a big super administrator at the moment. So by taking on Mercer Admin they will become a much bigger. So Mercer.It'll be almost like a reverse takeover I suspect. And what that is going to do to the quality of service. One waits with bated breath.

I think it's, it's going to be a fascinating year. 2026 Is the year for third party administration.There's going to be lots of shakeout and I, I think the days of mid sized and smaller funds giving everything to one outsourced service provider probably behind us. I think there's going to be a lot more a la carte.We take contact center from there and we take registry from here and we take member services from there and complaints is handled by a different provider and operations teams at super funds need to be geared up to manage multiple parties who deliver the services on their behalf. Whereas before there was a big preference for know a single service provider, one choke and all that.Yeah, those days are gone and well not gone but they are diminishing and there are a large number of super funds now that have such scale that in house administration makes a lot more sense than it did 10 years ago.

Oh yeah, absolutely.

They can justify, you know, deploying their own registry, having their own center, having their own complaint team and claims teams.

Yeah.

And yeah, we're going to save a great mishmash of insourcing. Outsourcing, Yes.

I mean the big retail funds, a lot of them never considered an insource or outsource. They've just always Done their own admin. One that I know well of course is Macquarie. Cause that's where I used to work.But yeah, they've always just done it internally. It was never any question, it was never looked at any other way as far as I'm aware. It's just part of how they do business.And they don't actually have that many members comparatively.It's just the balances are enormous, which does allow you, when you don't have that many members, but very high balances, it does allow you to run a slightly less efficient administration side of things because your cost per member as a percentage of their, of that member's balance is still very low. You know, if your average balance is a million bucks, happy days.Compared to average balance in many of the industry funds where it's like 30 or 50 grand or whatever.

So, yes, onto your big idea, your first big idea for the year. What's on your mind?

So I listened to this fascinating another podcast the other day called Two Bobs, which I do enjoy a lot. It's actually for owners of creative businesses and consulting businesses like my own.They have lots of interesting ideas around sales, marketing, business management, people management, all kinds of things. And what they spoke about, the one I listened to the other day was this issue of mechanistic versus sort of ecosystem or organism thinking.The idea being that if you think of a business, whether it's an enormous super fund or you know, Mayflower with 10 people, if you think of it as a machine, then you're always looking to tweak things, to fine tune the running of the machine like you would with a, you know, a fancy car or you know, we often like to compare businesses to Formula one. You know, if they can basically rebuild an entire car in 20 seconds, why can't we make manage death benefit claims?But that's because when you're rebuilding a Formula one car, that's a machine and you know that the tyres always fit on in this particular way and the bolts always turn that way and they need three and a half turns to be perfect and, and those things don't change, or if they do change, there's lots of testing each time.And whereas if you change things in a business, you bring a new person in or, or something changes in the environment, or you can look up, you know, porters, five forces and all that sort of stuff, as well as internal things, you have to understand that things don't stay the same. It's a living, breathing organism or ecosystem.And when you make changes, you can't Expect that if you tightening the bolt three and a half times, worked three weeks ago, that it's going to work for the next 10 years and that it's not going to also have unexpected consequences somewhere else in the system. And I think this is, it's a really good way of thinking about businesses, but also the whole super ecosystem.When you think about the regulators and where time and effort get spent and the things that we focus on and all those sort of things and, you know, to understand that to err is human.Because if you look at, if you look at, I mean, if we take the, the issues around insurance and death claims handling, and if you look at that purely as a machine and go, well, this is an issue of widgets down a pipe. It's a widget in pipe machine. Some of the widgets are too big, got stuck, the whole pipe came unstuck.If you just look at it like that, then you're going to say, well, the trick is to get a bigger pipe or smaller widgets.But if you look at it and think about the fact that there's people involved and there's a lot of psychology around weighting, there's a whole science of it called queuing theory.And you think about the people who are in the, the team that's doing the processing, you start to understand that this is a, this is an ecosystem problem. It's not a, it's not a mechanic problem. And in fact, to me, this was brought home quite astoundingly at a presentation I saw recently.And I won't mention who gave the presentation, but they were looking across the industry and they said one of the reasons that the insurance claims aren't working very well is that claims managers, it's basically their fault because they're not doing a good enough job.

Wow, that's pretty reductionist. Yes.

Yeah, because that's the mechanistic thinking. Right. I'm looking at all the different bits in it and I'm looking at claims managers as, you know, widget number three.And if that's where the holdup is, then there's something, there's a problem with widget number three. Interesting way of thinking about life.

I really like the episode and, you know, made me reflect on how I was running own business and you just treating it like a, like an organism that you try and make a change and there's side effects and there's unintended consequences, perfectly predictable. And therefore the approach you need to take is treating everything like an experiment. Going to try this, see what happens, test the outcome?Is there a benefit? What else happened? Looking around something.But before celebrating too soon, you know, I think it's a much more astute way to run an operation rather than just think, you know, I pulled this lever this way last time. It must have the same outcome this time.

Yes. Or I pulled this lever in this sort of process over here. So in this.Well, the same process in a different fund or a similar process, what looks to be a similar process in the same fund, applying the same hammer to it because it looks like a nail.

Yeah.

And then, you know, being surprised when you don't get the result that you want. But yeah, that sort of taking a far more test and learn, test and learn.And we do that in our business when we, when we do the big PDS technology rollouts.One of the things we always have is an early adopter testing process where the business, we work with the business to agree what the new process is going to be for PDSs. And everyone signs off, yep, this is definitely going to be great. And we workshop it and it's going to be amazing.And then we always test and there's always something that gets changed. That way we know by the time we roll it out to absolutely everybody, we're in a much better state.And it's much more likely to go to be successful because we, you know, we've done some testing before. We, we throw it at everyone.

Awesome. So let's, let's treat our teams more like people. Let's treat our, in fact, our entire organization, our operations as living, breathing organisms.

This is crazy talk. It's a machine. I'm just going to bash it harder with a, with something, then it'll work.

Very good. So let's wrap it up, Saraji.

Yes. Off to a good start. 2026, Here we come.

Yeah, here we come. We've got lots more great episodes lined up, so stay tuned and remember to subscribe to this episode.Wherever you listen to podcasts, we will speak to you soon.

Sounds good. See you soon. Bye.

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