The man behind the comprehensive investigation into Australia’s superannuation system, Jeremy Cooper, says super funds should have more access to member’s financial data, so they can better serve customers.
Mr Cooper, who chaired the Cooper Review in 2009 and 2010, feels the biggest hurdles funds face are not being able to access reliable financial data and not understanding the retirement goals of members.
The current Challenger Chair of Retirement Income, he believes that giving funds access to data collected by government agencies and banks may help retiring Australians better plan for their futures.
He said that some “very large funds” in Australia had limited knowledge of their customers, with information restricted to balance, street address and name, and that funds are simply operating in default mode when they could be doing so much more.
“From that position, being able to offer a 21st-century retirement solution, [is a challenge],” said Mr Cooper.
“And, of course, when you’ve got hundreds of thousands of members, or in some cases millions, that just adds to the enormity of the problem.”
He suggests enabling funds to access Centrelink records, information from the Australian Taxation Office or even the ability to procure information from the Federal Government’s Review into Open Banking in Australia – all of which have inherent problems that go beyond privacy issues.
One challenge is how to formulate the data so that it’s useful for super funds. Another issue is how will this data be used, for instance, could a super fund pass customer information onto a contracting analyst?
“If we work on the principle that most members trust their super fund more than they trust their bank … maybe that creates opportunities for super funds to enter that space,” said Nick White, Mercer Global Director of Portfolio Construction Research.
Mr Cooper said that super funds need to include data for future governance purposes, making it “part of the culture of whatever organisation you’re in – to really value that data and value the single source of truth of it – and to make sure that data is really regarded as important, because that’s where your customer edge comes from”.
He also gave a nod to the self-managed superannuation industry, because it already knows the financial and retirement goals of its retirees, calling it the gold standard to which the industry as a whole should aspire.
Read more at Investment Magazine
Would trust your super fund with full access to your financial data?
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