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News: BUSSQ, Elanor Investors, Vanguard 07

Opinion: Jenna Hayes, Income Asset Management

SG increase reignites superannuation debate

Matthew Wai

While our super system may be the envy of much of the world, the Superannuation Guarantee finally hitting 12% has seen some renew calls for the mandatory system to be scrapped as Australians continue to struggle with the cost of living.

A recent survey from Super Members Council found about 79% of Australians aged 50 and older see super as ‘very important’ to their retirement, while 70% said they would not have saved enough for retirement if it weren’t mandatory.

However, Fresh Thinking Economics chief economist Cameron Murray argues that people shouldn’t be “young and poor, and old and rich”, something he says the system enforces.

“[Super is] successful at amplifying wealth inequalities and making older people disproportionately richer than younger people historically – I don’t know if that’s success but that’s what it’s done,” Murray says.

“We’ve got this system that’s not quite mature but is already exposing that a typical person in their 60s and 70s with a lower rate of super is richer than the typical person aged 45 and below, and yet we’ve just changed the compulsory contribution from 11.5% to 12%.”

Murray says the younger generations need that money more right now than they will when they reach retirement.

“We’re making those families give up 12% of their income so they can be richer when they’re old, and still receive the Age Pension… We should have some coherent standard or expectation,” Murray continues.

“We pay $20 billion of Family Tax Benefit to young families because they’re too poor, and we make those young families contribute something in the order of $20 billion in super because they’re too rich – it’s ridiculous.”

A recent report from the Grattan Institute on the government’s super tax concessions claimed those exercising the concessions are already saving enough for retirement. In turn, super has slowly transformed into a “taxpayer subsidised inheritance scheme,” it said.

However, people struggle with many tradeoffs when it comes to voluntary savings models.

A recent review by Amundi Investment Institute found there are many behavioural factors that go into making savings decisions, particu-

larly in relation to retirement, like ‘present bias’ and procrastination.

Viola Private Wealth partner and adviser Peter Nevill says the pool of retirement savings in Australia is the “measure of success” and the envy of many other countries grappling with the surging costs of government benefits in retirement.

“There is no better vehicle of forced savings that has the dual benefit of funding lifestyles in retirement and easing the burden on the public purse,” Nevill says.

However, Murray says the hefty administration fees paid by super fund members are also eating into said savings. Despite falling drastically in recent years, Australians are still paying over $30 billion in super fees per year, according to Rainmaker Information’s Superannuation Benchmarking Report

But Arrow Private Wealth associate director, private clients Kreston Leggett points out the fees fund essential services such as customer support, digital infrastructure, and cybersecurity.

“While $30 billion in annual administration fees may seem excessive in isolation, it’s important to consider that this supports a superannuation system managing over $4 trillion in assets on behalf of 26 million Australians,” Leggett says.

“That said, it’s fair to scrutinise certain expenditures, such as aggressive marketing campaigns, particularly when industry funds heavily advertise on television.

“It’s also worth noting that significant consolidation across the superannuation sector in recent years should ideally lead to greater efficiency and put downward pressure on administration costs through economies of scale.”

As most Australians simply park their savings in a bank account, albeit possibly with a decent interest rate attached, those interest rates don’t compare to the returns achieved via super. The average annual return on super since the system’s creation is over 7%, and for FY25, the average MySuper return is predicted to be around 10%.

“Superannuation empowers individuals to take greater control of their retirement through a highly tax-effective structure for personal wealth creation,” Leggett adds.

“Beyond the personal benefits, superannuation plays a vital role in the broader economy by channelling billions of dollars into local investments, driving job creation, and ultimately improving the quality of life for all Australians.” fs

09

Executive appts: Cbus, Escala Partners, First Super 12

Feature: Platforms

CSLR revises levy estimate

Eliza Bavin

The Compensation Scheme of Last Resort (CSLR) has released a FY26 revised levy estimate, coming down slightly from the figure estimated in January.

The CSLR said the need for a revised estimate was triggered due to the initial levy estimate, issued in January 2025, exceeding the $20 million sub-sector cap for the personal financial advice sub-sector.

With the assistance of CSLR’s principal actuary, the revised estimate for the 2026 financial year has been calculated at $75.698 million, down from the initial estimate published in January of $77.975 million.

The key movements in comparison to the initial FY26 estimate are in the personal financial advice sub-sector, seeing a decrease of $2.821 million and the securities dealing sector, with an increase of $2.380 million.

“As the personal financial advice subsector estimate exceeds the sub-sector cap of $20

Continued on page 4

Regulatory burden a problem: APRA

Jamie Williamson

Thirty-four percent of the entities regulated by APRA feel changes made to the prudential framework failed to adequately consider the increased costs imposed on the industry, while 33% say the compliance burden outweighs the benefits.

Those are some key findings from APRA’s latest stakeholder survey, which received more than 260 responses.

Respondents were asked whether changes to APRA’s prudential framework sufficiently considered the costs of regulation imposed on the industry. Some 40% said the consideration was inadequate; super funds rated their experience at just 21%, while the overall rating was just 24%.

Asked about the balance of regulatory burden and benefit, 33% said there is too little benefit to the industry for the level of burden.

Super trustees rated the balance at 71%, while life insurers put it at just 63%.

Continued on page 4

Kreston Leggett Arrow Private Wealth

By Jamie Williamson jamie.williamson@ financialstandard.com.au

Never a guarantee

Hopes for a nice easing into the new financial year were dashed early this month when the Reserve Bank of Australia (RBA) opted against cutting the interest rate and keeping it at 3.85%.

It was a decision that shocked many, including the bulk of economists and other experts who were certain we’d see a reduction in July, followed by another in August. In fact, the market was so convinced that it had priced in a roughly 90% chance of a trim.

Factors such as the tight labour market, and continued uncertainty, including stemming from US tariffs, contributed to the call. The RBA also cited the lag in seeing the effects of monetary policy decisions, saying it was still too soon to confidently say inflation is sustainably tracking to where we want it.

Naturally, it took little time at all for RBA governor Michele Bullock to become a target, including copping questions around whether the RBA is really being as transparent and informative about its thinking and decision-making processes as it has endeavoured to be.

Director of Media & Publishing

Michelle Baltazar

Editorial

Jamie Williamson

Karren Vergara

Eliza Bavin

Andrew McKean

Matthew Wai

Research

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Sanjesh Pinnapola

Advertising

Michael Grenenger

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Managing Director

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+61 2 8234 7530

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Stoic as ever, she rejected the assertion, saying there was no reason for the market to not know what the RBA is doing given how much more frequent the central bank’s monetary policy updates are.

But it’s not just updates on policy – the RBA has never been more communicative and open. Bullock gives press conferences for the public after every decision, explaining why they’ve chosen the road they have and, as of this month, even disclosed the actual vote tally. In this instance, the board was split 6:3, with three believing a cut was the way to go.

Despite this show of transparency, the focus was inevitably on the negative and many were quick to express their disappointment. While not disagreeing with the RBA’s call, even Treasurer Jim Chalmers responded swiftly, noting it was “not the result millions of Australians were hoping for.”

While it may seem callous, I think if you were to ask just about any financial adviser, they’d tell you that if you feel a single rate cut is going to make a difference to your finances

michelle.baltazar@financialstandard.com.au

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then you probably can’t afford your mortgage anyway.

That said, there is good reason Aussie borrowers are struggling and it isn’t their fault. Coinciding with the July meeting, Mozo released its 10-Year Mortgage Snapshot which showed that since 2015 repayments have surged an average of 98% and loan sizes are up 69%. Breaking those figures down, Australian mortgage holders are paying $71 more per day than they were 10 years ago.

What this means is that even if the RBA had cut this month, it is highly unlikely there would have been much relief at all. It also demonstrates that those prospective homebuyers banking on a lower interest rate before jumping into the market are all but wasting their time – the interest rate means very little; property prices are the real issue. So now we wait. It’s widely predicted we’ll see a cut in August and at least one other thereafter. My hope is that those who do feel they need it get it – I just also hope they realise it’s not a silver bullet and that Michele Bullock isn’t the problem. fs

james.yin@financialstandard.com.au

alison.mintzer@issgovernance.com

Elanor Investors courts suitors

Jamie

Williamson

Elanor Investors is currently considering several offers, including potential takeovers, saying it has so far engaged with more than 15 interested parties as part of its strategic review.

In a business update, the real estate fund manager said it is continuing to “examine a range of options to maximise value for all securityholders.”

This includes having received non-binding indicative offers (NBIOs) from a number of parties, as well as working with other entities for a potential recapitalisation of the business including a refinancing of the balance sheet debt.

“There is no certainty that any of these NBIOs or other options to maximise value for all securityholders will result in a transaction,” the group said.

As part of the strategic review, Elanor has undertaken an asset realisation program which has so far resulted in divestments worth more than $300 million in value.

Elanor Investors said it also continues to refine and enhance its corporate governance, saying it has decided to establish a separate independent trustee and responsible entity board for its managed funds.

Doing so would see the replacement of many directors on the board of Elanor Funds Management Limited, with a majority independent board to be appointed.

A new responsible entity would be appointed for the Elanor Investment Fund, with the same board of directors as Elanor Investors Limited.

Finally, Elanor said it still plans to commence a search for a chief executive, following the departure of Glenn Willis in September 2024. It said it will do this once the balance sheet is appropriately stabilised. fs

Insignia finalises 1300 staff transfer

Insignia Financial has finalised the outsourcing of about 1300 staff who worked in the master trust business to SS&C Technologies after striking a deal in February.

At the end of June those working in administration, technology and digital teams that support Insignia’s master trust business officially moved to SS&C. Insignia said members, employers and advisers will continue to engage with their existing contacts without any disruption, ensuring continuity of service, operations and product knowledge.

Meanwhile, Insignia will retain functions such as claims, complaints, product development, relationship management, marketing, member education and advice and guidance.

The move follows Insignia severing ties with NAB last November, which meant ceasing the use of the bank’s systems and technologies.

This involved Insignia transferring 700,000 MasterKey and Plum accounts, 55 systems and applications and more than 100 terabytes of data.

MLC Super chief executive Dave Woodall said: “We’re delivering on our commitment to simplify and transform our superannuation business to convert our size into meaningful scale benefits, through lower cost-to-serve, competitive fees and industry leading service outcomes, under our go-forward brand, MLC.” fs

01: Chris Taylor chair BUSSQ

BUSSQ’s boardroom brass cleared by KPMG

Andrew McKean

Queensland-based industry super fund

BUSSQ, which has ties to the scandalplagued Construction, Forestry, Maritime, Mining, and Energy Union (CFMEU) through its board, emerged largely unscathed from an independent report by KPMG.

The quote

We welcome the report’s positive findings into the board’s overall compliance in these areas, which come as no surprise.

BUSSQ was hit with additional licence conditions by APRA last year over concerns about its governance and expenditure practices, particularly its relationship with the CFMEU, and was therefore required to commission a review assessing the fitness and propriety of its board members and financial dealings.

KPMG’s report concluded that BUSSQ’s current directors and officers were fit and proper, and that, apart from one area where recommendations have been made, CFMEU connected expenditure decisions are consistent with sound and prudent management.

KPMG also determined that the current directors remain fit and proper under SPS 520, which requires trustees of APRA-regulated super funds to assess whether individuals in responsible person positions demonstrate the competence, character, honesty, integrity, and judgement necessary to perform their roles, and to evaluate any conflicts of interest or affiliations that could compromise their objectivity.

Notably, BUSSQ overhauled its internal fit and proper processes in 2023, revamping sev-

eral policies and procedures to be more aligned with SPG 520 – the accompanying guidance to SPS 520.

Meanwhile, BUSSQ’s annual sponsorship deal with the CFMEU, which covers events and promotional services for a flat fee, was found to have achieved its stated purpose, delivered on the objectives outlined in the business case metrics, and included mechanisms to monitor outcomes.

KPMG, however, recommended that the fund further clarifies how it demonstrates fair value, including by outlining costs of similar arrangements, which it said would in turn provide further evidence that the arrangement is conducted on an arm’s length basis.

As for arrears collection, annual compliance agreements entered with the CFMEU for the sole purpose of recovering outstanding superannuation contributions from employers – aside from recommendations to enhance board-level reporting on these expenses – were otherwise found to be above board.

“We welcome the report’s positive findings into the board’s overall compliance in these areas, which come as no surprise. Strong governance practices have been a focus for this Board since I became chair three years ago. We will continue to make improvements, as we’ve always done, to ensure our governance practices meet the high expectations of our members and the regulators,” BUSSQ chair Chris Taylor01 said. fs

Vanguard, CFS deliver strong FY25 returns

Karren Vergara

The two retail superannuation funds delivered strong returns for members, but it was the low-cost, indexed-based strategy that outmuscled the other.

Vanguard Super returned 13.5% p.a. for 2025 financial year for members aged 47 and under

Since its inception nearly three years ago, Vanguard Super’s default MySuper Lifecycle product has achieved 13.6% p.a.

Those in the 48- to 54-year-old bucket achieved between 12% p.a. and 13.2 p.a. Members aged between 55 and 62 earned between 10.2% p.a. and 11.8% p.a.

At the option level, High Growth Diversified delivered 13.5% p.a. for the year, while the Growth and Ethically Conscious Growth Diversified made 11.8% p.a. and 12.6% p.a. respectively.

The International Shares option turned in 16.7% p.a. while Australian Shares returned 13% p.a.

Vanguard Asia-Pacific chief investment officer Duncan Burns said the low-cost, index-based approach to superannuation is continuing to deliver strong outcomes for members.

“The 2024-25 financial year was a tale of two halves. The year began on a relatively stable note, while the second half saw periods of market volatility, which is a normal part of long-term investing,” he said.

“Superannuation is a long-term investment, and it’s important for Australians to maintain a long-term perspective.”

Meanwhile, Colonial First State (CFS) confirmed that only two of its MySuper Lifestage options delivered above 10% p.a. at the time of writing.

The FirstChoice Employer Super growth fund (MySuper Lifestage 1975-79) delivered 12.8% p.a. while the FirstChoice Employer Super balanced fund (MySuper Lifestage 1965-69) made 11.4% p.a.

While the returns for Lifestage options for younger members who were born after 1980 are not yet finalised, based on May 2025 results they are on track to achieve about 13% p.a.

CFS chief investment officer Jonathan Armitage said global and domestic equities were a key driver of returns over the year.

“We have also benefited from the recent additions of emerging market equities and increasing the hedging ratio of global equities,” he said.

“Pleasingly, following three consecutive years of doubledigit returns we have been able to significantly improve performance over both three and five-year periods. This achievement underscores our commitment to delivering consistent value to our members.

“Despite the rebound, uncertainty remains elevated. This highlights the volatile nature of the current market environment. As we anticipated, investment returns are now starting to come back down to more normalised levels but remain higher than long running averages.” fs

CSLR revises levy estimate

Continued from page 1

million, the scheme has notified the minister for financial services of the need for a special levy of $47.289 million,” the CSLR said.

Meanwhile, the revised estimate for the securities dealing sub-sector is $4.7 million. The $2.4 million increase will be funded by CSLR’s cash reserves and recovered in the FY27 annual levy for securities dealing.

CSLR chief executive David Berry said the harm caused by those in the finance sector doing the wrong thing disproportionately impacts and detracts from those acting correctly.

Berry noted that the rate and number of firm failures show little sign of abating.

“Whilst we are disappointed at the need for a special levy, we recognise these funds provide a measure of compensation for those who have experienced lengthy and stressful financial loss,” Berry said.

“The CSLR continues to operate in alignment with the legislative framework in a manner that is effective, efficient and economical as we strive to increase consumer trust across the financial services sector.” fs

Regulatory burden a problem: APRA

Continued from page 1

More positively, 93% of respondents said APRA’s supervision enhanced the financial and operational strength of their organisation, while 96% said the regulator’s supervision had been a positive for their risk management practices.

Eighty-two percent said the prudential requirements had positively influenced financial management, and 74% believe APRA provides sufficient support when changes are proposed.

“At a time of great international volatility and economic uncertainty, it’s important the Australians can rely on the financial and operational resilience of our banking, insurance and superannuation sectors. It’s clear the entities we supervise also see the value in what we do to protect financial stability and to improve risk management in their organisations. We welcome their continued endorsement,” APRA chair John Lonsdale said.

“We are also aware of the need for us to strike the right balance between financial safety and not unnecessarily burdening industry in a way that lessens competition and productivity – a message that once again our regulated entities want to remind us about.

“These reflections, alongside feedback we receive from our stakeholders across industry, government and regulatory sector, are contributing to our thinking as we develop our priorities for next financial year in an environment of heightened risk.”

Meanwhile, the review also highlighted financial institutions’ feelings about certain emerging trends. It revealed that the threat of cyber security was listed as a critical or high risk among 91% of respondents.

Following that, geopolitical risks and their potential to magnify liquid, market, credit, investment, and insurance risks, was flagged as critical or high by 70% of respondents, while 48% said the same for operational risk. fs

01: Jeff Peters chief executive Platinum Asset Management

The quote

In many ways, it represents the culmination of the work that started 18 months ago to return Platinum to where it was.

THREE LINE HEAD

L1 Capital, Platinum seal merger deal

Jamie Williamson

The two parties have entered a merger implementation deed, with the Platinum name to be retired from the entity and the newly created ‘MergeCo’ to be listed under a new ticker code.

As previously disclosed, under the deal Platinum will acquire 100% of L1 Capital, while L1 Capital shareholders will own about 74% of the merged entity. The balance will be owned by existing Platinum shareholders.

The merged business will be led by current Platinum chief executive Jeff Peters 01, while current chief financial officer Andrew Stannard and chief operating officer Joel Arber will remain in their roles.

While the group will be rebranded, the Platinum and L1 Capital brands will be retained at the product level.

The Platinum board, which has unanimously endorsed the deal, said it believes the merger will deliver several benefits. These include exposure to alternative strategies which will diversify assets under management; complementary client relationships and potential for combined distribution capabilities; and pro-forma for $20 million of annual pre-tax synergies due to overlaps in the businesses, among other things.

Platinum said it is targeting a 25-30% reduction in operating costs. It also confirmed there will be no further special dividends paid ahead of the merger.

“For us, this is a very exciting day… In many ways, it represents the culmination of the work that started 18 months ago to return Platinum to where it was,” Peters said.

As for whether the investment teams will also be merged, Peters said: “I think it is safe to assume

we will leverage the best capabilities of both firms, there will be opportunities for the L1 team to add value in relation to the Platinum products.”

Meantime, L1 Capital co-chief investment officer Mark Landau said: “I think the way people should think about it is that, from an L1 point of view, we only launch funds that are best in class… to the extent we think there’s more people required, we’re open to anything to ensure it’s an A+ product. We have some announcements to make in the coming weeks… we’re viewing this as a major, positive inflection point for the L1 funds.”

According to Peters, the prevailing sentiment of discussions the group has had with existing shareholders on the merger has been one of optimism, saying they are looking forward to “where we come out post-completion.”

However, Landau said L1’s discussions with clients have stemmed largely from curiosity around why L1 is doing the deal. He said investors have raised concerns that he and L1 Capital co-founder Raphael Lamm would be distracted by the merger but reinforced that they “just want to focus on stocks.”

Landau and Lamm, who are currently joint managing directors of L1, will be stepping back from management responsibilities to focus on portfolio management. They will also not take up a board position.

“… We love investing, that’s the best thing for clients and for us in terms of personal satisfaction,” he said.

Finally, when compared to other multi-boutiques in the market like Pinnacle and Fidante, Lamm said L1 Capital has never had an objective to be the biggest by distribution footprint, but to be the best. fs

ASIC funding levy to charge advisers $46.2m

Karren Vergara

The financial advice sector can expect to contribute $46.2 million to ASIC’s industry funding levy for the 2025 financial year, new estimates show.

ASIC’s Cost Recovery Implementation Statement (CRIS) report shows that advisers who provide personal advice to retail clients on relevant financial products, which comprises most of the sector, will pay $39.3 million.

This is based on 2680 AFSLs with 15,233 advisers. In essence, an AFSL will pay the minimum levy of $1500 plus $2314 for every adviser on their books.

Those that provide general advice only will pay $5.2 million. There are 1122 of these entities and they can expect to pay a flat levy of $4665. The 565 licensees that provide personal advice to retail clients on products but are not relevant financial products will pay $44,000.

Licensees that provide personal advice to wholesale clients only, in which there are 1991, will pay $16 million and pay a flat levy of $825.

In budgeting the $39.3 billion FY25 levy, ASIC expects to allocate $17.2 million on enforcement activity and $5.6 million on supervision and surveillance.

ASIC flagged it has prioritised its policing of cold-calling superannuation switching business models, saying it is an issue that has reached an “industrial scale.”

ASIC has also made this issue prominent in the CRIS report along with investigating SMSF establishment advice, which includes an assessment of related AFSL policies and procedures.

The levy will also spend money reviewing on how AFSLs rely on offshore service providers and how they manage the risks.

“In particular, we will look at how they manage risks related to technology, data sharing and privacy. We will also publish resources that will help licensees improve the security of client data when sending it offshore,” ASIC said.

The total levy estimates budgeted for advisers for 2025 is slightly lower than the amount ASIC estimated for the prior year of $48.4 million. fs

FSPOWER 50

The 50 most influential financial advisers in Australia.

The FS Power50 is back again in 2025, celebrating the 50 most influential financial advisers the country has to offer.

We are on the hunt for advisers that are proudly advocating for both the industry and their clients, powering and shaping the future of financial advice in Australia.

Nominations close 27 July

or

AFSL compliance head banned

Matthew Wai

Former Crown Wealth Group director and head of compliance Andrew Moore has been banned for three years for failing to recognise the seriousness of fees for no service conduct, committed by one of its representatives at Lighthouse Partners.

Kiriley Roper was recently banned for 10 years by ASIC for charging fees for no service to the tune of more than $80,000. Roper was authorised by Crown Wealth Group when Moore was head of compliance and responsible manager.

ASIC believes Moore is not adequately trained or competent as he failed to notify ASIC despite becoming aware of the fees for no service, and delayed reporting the conduct to ASIC until at least six months after it was first identified.

It is alleged that the misconduct occurred between January 2022 and October 2023, affecting 14 Lighthouse Partners clients.

As a result, the conduct was not investigated, and Lighthouse Partners failed to refund fees totalling $81,653 plus interest to those affected.

Moore has been banned from performing any function and controlling an entity that carries on a financial services business for three years, ASIC said.

The banning took effect from July 3 and has been recorded on ASIC’s banned and disqualified register. fs

Acclime acquires Boutique Capital

Corporate governance and advisory services firm Acclime has acquired Boutique Capital, a North Sydney-based specialist in fund incubation and wholesale fund services.

Acclime said the move significantly expands its capabilities in fund establishment and administration, strengthening its position as a partner to both domestic and international fund managers operating in Australia and New Zealand.

Boutique Capital offers a bespoke approach to fund incubation, offering end-to-end services including licensing, trustee, legal, compliance, registry, investor support, AML/KYC compliance, FATCA/CRS reporting, tax compliance and fund accounting.

This acquisition follows Acclime’s ongoing strategic expansion in Australia and New Zealand, including recent integrations of Bedford in Australia, and The Advisory Group and Rockburgh Fund Services in New Zealand.

“This acquisition represents another transformative step for Acclime in Australia,” Acclime group chief executive Izzy Silva said.

“By bringing exceptional specialist firms into our fold, we’re expanding our capabilities and empowering our clients to thrive both locally and throughout the region.”

Acclime regional managing director for Australia and New Zealand Randolph van der Burgh said Boutique Capital brings specialist fund knowledge and a strong client-centric culture.

“They are a great fit for Acclime, and we are delighted to welcome the team into our Asia Pacific fund services group,” van der Burgh said. fs

01: Judith Fox chief executive Stockbrokers and Investment Advisers Association

SIAA chief executive to retire from role

Eliza Bavin

Stockbrokers and Investment Advisers Association (SIAA) chief executive Judith Fox 01 will retire at the end of 2025 once a replacement has been appointed.

SIAA chair Hamish Dee said Fox has advised that she has decided to retire after six years in the role.

The quote

Leading the team at SIAA and serving our members through a tumultuous period has been a privilege and a joy.

Dee said Fox had provided outstanding leadership and has ensured that SIAA has played a pivotal role in addressing the policy and regulatory changes that have occurred during her tenure.

“Judith has been a passionate advocate for the stockbroking and wealth management sector, leading vital industry discussions and representing the interests of our members with professionalism and dedication. She is held in the highest esteem by the SIAA board of directors, the members, staff and the many stakeholders with whom she engages,” Dee said.

“On behalf of the membership and board of SIAA, I would like to thank Judith for her tireless dedication to our industry and profession and recognise the significant impact she has had.”

Dee said Fox has been instrumental in lifting the profile and increasing the influence of SIAA.

“She has driven capability uplift across the sector through sector-wide collaboration, innovation, thought leadership and professional development,” he said.

Speaking on her decision to step down, Fox said the role had been enormously professionally and personally satisfying.

“Leading the team at SIAA and serving our members through a tumultuous period has been a privilege and a joy,” Fox said.

“With an outstanding team I am proud to have strengthened the voice of our members as well as peer engagement, improved financial sustainability, and delivered key advocacy outcomes. There is more to be done, and my decision was not taken lightly. Ultimately my view is there is a point where organisations need renewed chief executive leadership, and this should occur when performance is strong.

“I want to acknowledge and thank my chair Hamish Dee and former chair Brian Sheahan as well as our expert board members and team for their support and counsel over the years.”

SIAA said the board will initiate a comprehensive search for a new chief executive, ensuring a seamless transition of leadership. fs

AustralianSuper’s MySuper option returns 9.5%

Karren Vergara

AustralianSuper’s MySuper option delivered 9.5% p.a. for members in the 2025 financial year, slightly trailing behind its peers.

The MySuper Balanced option, in which the majority of its nearly 3.7 million members are invested, has about 25% invested in Australian equities and 34% in global equities.

Some 15% is invested in infrastructure, 10% is in fixed interest and 5% is in private equity.

“Equities in Australia and overseas were significant drivers of returns this year, as AI and technology investments continued a three-year trend of boosting equity markets,”

AustralianSuper chief investment officer Mark Delaney said.

“We maintained our diversified portfolio while also capitalising on good growth in share markets.”

Delaney pointed to a “challenging 12 months for active investors” as one of the detractors of performance.

Nevertheless, he said that delivering “this strong result for members is pleasing”.

For their default options, Australian

Retirement Trust (ART) made 11.2% p.a. while HESTA returned 10.2% p.a.

Aware Super delivered a return of 11.9% p.a. and Vanguard Super’s default MySuper Lifecycle product made 13.5% p.a.

During the period, the nation’s largest superannuation fund wrote off a whopping $1.1 billion investment in online education firm Pluralsight following the company’s restructuring.

AustralianSuper head of international equities and private equity Mark Hargraves said last August that the fund remains strongly committed to private equity, as it’s been the topperforming asset class over five and 10 years for the fund, delivering returns of 10% p.a. and 12% p.a. respectively.

AustralianSuper’s default option achieved an average return of 8.7% p.a. over three years, 8.5% p.a. over five years and 7.9% p.a. for 10 years.

Meanwhile, in the last financial year

AustralianSuper’s High Growth option returned 10.6% p.a. while the Choice Income Retirement Balanced option earned 10.4% p.a. fs

01: Jenna Hayes executive director of capital markets Income Asset Management

Navigating private credit in a latecycle environment

For investors, the challenge is clear: cash earns little, but rushing into deals risks overpaying for weaker assets. One option is senior secured syndicated loans—a high-yield, defensive investment for wholesale high-net-worth investors seeking both yield and resilience in a latecycle market.

Late-cycle headwinds

Fund managers confront a difficult balancing act. With capital to deploy and performance pressures mounting, many feel compelled to hunt for deals even as valuations reach stretched levels.

The pendulum has swung dramatically from the post-GFC era when asset prices were depressed, and lenders could demand rich covenants. The current landscape finds sponsors and borrowers with strong bargaining power. In a scramble for volume, managers may accept thinner margins or loosen covenant protections — risks that only become apparent when credit conditions sour. This ‘reach for yield’ in a supply-constrained market leaves portfolios vulnerable when credit conditions inevitably tighten.

The problem is compounded by the structure of many private credit funds. When investors need liquidity, they face a choice - either wait indefinitely or sell their positions in distressed secondary markets at steep discounts. In addition, stale net asset value calculations mask growing credit problems until it’s too late to react.

Direct loan investing

One remedy to the cycle-timing problem is to bypass pooled vehicles altogether and invest directly in individual loans. This approach allows investors to hold off deploying capital until they find the right opportunity. By underwriting each loan on its merits, investors gain control over timing, credit quality, collateral coverage and covenants. They can steer clear of so-called “cov-lite” structures—loans with minimal maintenance tests—and focus on senior secured exposures that sit at the top of the borrower’s capital structure.

Direct investing also offers transparency. Unlike pooled funds, where investors depend on quarterly snapshots, direct investing provides continuous insight into asset performance and covenant adherence. Investors know exactly which assets they own, how they perform and whether triggers have been tested. As a result, they avoid the potential mismatch between a fund’s reported value and the true market price for a distressed loan emerging under stress.

Syndicated term loans

Historically, syndicated bank term loans were exclusively the province of large institutions. Major banks would arrange financings for blue-chip corporate borrowers—companies with substantial assets and reliable cash flows—and syndicate slices of the facility to other banks and institutional investors. While trading was limited, the asset class earned its reputation through meticulous due diligence, strict maintenance covenants and senior secured status. Loss rates on these loans have historically been very low, a reflection of both the credit quality of borrowers and the collateral packages underpinning the loans.

Today, wholesale high-net-worth investors can join this market directly, accessing largeticket, senior secured loans at yields that often exceed 9% per annum. This represents a notable pick-up over investment-grade bond yields. What makes syndicated loans uniquely attractive becomes clear when examining their mechanics. Borrowers agree to ongoing maintenance covenants—tests of leverage, interest coverage and other financial metrics—that, if breached, can trigger margin ratchets under a predefined leverage grid. In other words, lenders receive higher margins the weaker the borrower’s financial health becomes. Scheduled amortisation and cash-sweep provisions further lighten credit duration, returning principal to investors before a final maturity date.

Diversification and liquidity

Real world transactions illustrate the wide array and diversity of sectors that can access bank-led loans is wide, from infrastructure and real estate to financial services and utilities. While each deal is unique, the common thread is a combination of large asset bases, strong cash flows and the security of first-ranking collateral. For investors accustomed to the domestic bond market’s lending dynamics, the structural advantages are clear. New investors often question the liquidity profile- or the lack thereof. Unlike corporate bonds that trade electronically in seconds and trade daily on an active secondary market, syndicated loans typically change hands less frequently and require dealer support or brokered transactions for off-market trades. Trade settlement times can vary based on market conditions. Still, investors should consider syndicated loans an illiquid component of a diversified fixed income portfolio, allocating capital they do not expect to need at short notice.

Wholesale investors

For wholesale high-net-worth investors, syndicated loans deliver a powerful trifecta of benefits that

The quote

In a scramble for volume, managers may accept thinner margins or loosen covenant protections — risks that only become apparent when credit conditions sour.

address today’s market challenges: yield enhancement, credit quality and diversification. Yields above 9% can materially boost portfolio income compared with sub-5% IG bond coupons. At the same time, the senior secured status and active covenant structure of bank loans provide cover in a downturn that unsecured or subordinated securities cannot match. Finally, syndicated loans broaden sector exposure beyond the traditional bond markets—opening opportunities in healthcare, energy, infrastructure and more.

Hybrid reinvestment

In December 2024, the Australian Prudential Regulation Authority (APRA) announced that, following extensive industry consultation, it will phase out the use of Additional Tier 1 (AT1) capital instruments (hybrid bonds) by 2032. In the months since, a wave of funds and ETFs has emerged, positioning themselves as natural reinvestment options for displaced hybrid capital. But in my view, this misses the point. A major reason many investors were drawn to hybrids was the appeal of direct ownership—holding the security outright rather than a unit in a pooled vehicle. These new alternatives aren’t a like-forlike replacement. In fact, they’re not even close.

Proposed Division 296 changes

With the proposed Division 296 tax set to apply an additional 15% tax on superannuation earnings above $3 million—including both realised and unrealised gains—income-focused investments are becoming increasingly attractive. Unlike equities or property, where gains are capital in nature and often volatile, fixed income (as the name suggests) can offer predictable income without triggering capital gains, especially when bought around par. With RBA rate cuts likely to compress term deposit yields, SMSFs and large super funds are now actively reallocating to income-generating assets that offer both yield stability and tax efficiency.

Balancing yield and resilience

Navigating private credit in a late-cycle environment demands a careful balance between chasing yield and preserving capital. While pooled funds may tempt with diversification and ease of access, the timing risks and liquidity mismatches they entail can erode returns when markets turn. By contrast, direct ownership of senior secured syndicated term loans can appeal to wholesale investors seeking both higher income and defensive characteristics.

As regulators bring greater scrutiny to private markets, these qualities become even more valuable. fs

Advisers banned over Shield fund

Karren Vergara

Two former MWL Financial Services financial advisers who invested clients’ superannuation in the Shield Master Fund have copped bans from the regulator.

Matthew Simon Bradley has ceased working in financial services for eight years after ASIC found he advised certain clients to invest most of their superannuation into Shield Master Fund’s High Growth class or the Growth class, which were high-risk investments. Some also went into the Balanced class, which was deemed a mediumhigh risk investment.

Bradley was an authorised representative of MWL Financial Services from 11 October 2017 to 27 December 2021, and from 28 March 2022.

ASIC found that Bradley’s Statements of Advice (SoA) to certain clients included false and misleading statements that implied clients would enjoy better returns if their superannuation were invested in Shield.

This included projection tables and statements for client’s superannuation that did not have reasonable grounds and representations that Shield had a higher performing track record against other super funds when it had only been in existence for a short period.

MWL Financial Services is part of MWL Financial Group, which is headquartered in Melbourne. Bradley was based in the Chatswood office in Sydney. His banning order took effect from July 3.

For his part, ASIC banned Isaac Jacob McQueen from providing financial services for four years.

The bad advice Queensland-based McQueen provided was similar to the inappropriate advice Bradley gave, moving client savings into the High Growth class or the Growth class of the Shield Master Fund.

Between 31 October 2022 and 9 June 2023, he was an adviser at MWL Financial Services.

He then jumped to CWS Finance, which is under Interprac Financial Planning, between July 2023 and January 2024. fs

Blue Owl launches fund with Koda

Alternatives fund manager Blue Owl Capital has launched a private credit fund to local investors in partnership with Koda Capital.

The Blue Owl Credit Income Fund AUT is a feeder fund targeting financial advisers and their wholesale clients.

The unlisted unit trust invests in Blue Owl Credit Income Corp (OCIC), a private credit strategy that invests in a diversified portfolio of predominantly senior secured, directly originated floating rate loans to US middle and upper middle-market companies.

Koda Capital has seeded the fund for an undisclosed amount. Channel Investment Management is the responsible entity for the fund.

The underlying fund focuses on tailored debt investments, according to the PDS, including firstlien debt, second-lien debt, mezzanine debt and broadly syndicated loans.

The Australian unit trust charges management costs of 1.86% p.a. based on the net asset value. fs

01: Sonya SawtellRickson chief investment officer HESTA

HESTA returns 10.18% to default members

Eliza Bavin

HESTA’s MySuper Balanced Growth option has delivered 10.18% for the 2024/25 financial year, with the fund crediting the performance of listed equities and prudent management of market volatility for the result.

The outcome represents the third consecutive year of annual returns above 9% for the MySuper Balanced Growth option.

The quote

We started the year with a cautious stance, and our robust liquidity management and stress testing allowed us to take advantage of long-term buying opportunities...

Over 10 years to 30 June 2025, the fund’s default investment option – where most members are invested – has averaged an annual return of 7.64% and ranked in the top quartile over five, seven and 10 years.

Among other super investment options, Indexed Balanced Growth, High Growth and Sustainable Growth achieved very strong annual returns of 12.01%, 12%, and 11.06%, respectively.

HESTA’s Retirement Income Stream Balanced Growth achieved a return of 11.81% and Retirement Income Stream Conservative yielding 8.45%.

HESTA chief investment officer Sonya Sawtell-Rickson 01 said the fund’s investment team was on the lookout for opportunities to continue to drive performance and build the retirement savings for members over the long-term.

“We started the year with a cautious stance, and our robust liquidity management and stress testing allowed us to take advantage of longterm buying opportunities during the periods of market volatility,” Sawtell-Rickson said.

Sawtell-Rickson added policy announcements in the US and conflict in the Middle East had impacted markets in recent months, with management of these risks remaining a focus.

“While volatility has eased after a surge in March and April, geopolitical events remain an important consideration as we head into the new financial year,” she said.

“Our expectation is that global economic growth will likely be slower, though the response of several central banks has helped temper recession fears. Further rate reductions are expected over the year ahead, including here in Australia, which should provide additional support to the economy and households.”

HESTA chief executive Debby Blakey said the financial results were great news for the fund’s members.

“We are very pleased to report another strong performance for our members, particularly given the more volatile and uncertain period in global markets over the past six months,” Blakey said.

“The consistency of our returns over the long run can make a significant difference to our members, helping improve their retirement readiness.

“It was also great to see our income stream options perform well for the financial year, with the positive returns helping retired members maintain their savings as they draw an income stream and enjoy the retirement they deserve.” fs

AMP hit with multiple court filings

AMP has been served two separate legal proceedings; one a fresh class action and the other from Dexus Funds Management.

The class action – which has been lodged in the Federal Court of Victoria – has been filed against N.M. Superannuation Proprietary Limited (N.M. Super) and has also been commenced against AMP Superannuation and Resolution Life.

“The proceedings relates to allegations of higher premium payments by certain members of AMP’s superannuation funds for life insurance (death only cover, total and permanent disablement cover and income protection cover) during the period 2019 to 2024,” AMP said.

AMP confirmed it intends to defend the proceedings.

Separately, a further proceeding has been filed against AMP in the Supreme Court of NSW by Dexus Funds Management, in its capacity as the responsible entity of Dexus Property Trust and Dexus Operations Trust.

Dexus has launched the case against AMP

and Collimate Capital.

AMP said the filing has arisen out of a dispute between Dexus and Macquarie Retail regarding the disposal of the Macquarie Shopping Centre, following the sale of the former AMP Capital business, and relates to the sale value of that property.

This comes after the Supreme Court of NSW ruled that Cbus and UniSuper, the co-owners of Macquarie Centre, could force Dexus to sell its stake, valued at around $830 million.

Dexus flagged back in December 2024 that it would seek to appeal the court’s decision to force the sale of the asset.

Following the forced sale, which was one of the Dexus Wholesale Shopping Centre Fund’s major assets, Dexus underwent a strategic review and terminated several funds, including the Dexus Core Property Fund and the Regional Property Fund.

AMP said it also plans to defend these proceedings. fs

Executive appointments

First

Sentier chief steps down

First Sentier Investors has confirmed its chief executive is leaving at the end of the year.

After seven years with First Sentier Investors, Mark Steinberg 01 has announced he plans to step down.

Confirming the news, a First Sentier spokesperson said: “To ensure a seamless transition, a comprehensive search for his successor has commenced.”

“The selection process will include both internal and external candidates, as we aim to find the most suitable individual to lead the business into its next phase of growth and success.”

Steinberg first took over as chief executive in an interim capacity in 2018 when Mark Lazberger departed after 10 years in the role.

The business was still known as Colonial First State Global Asset Management (CFSGAM) then but was later rebranded to First Sentier Investors following its acquisition by Mitsubishi UFJ Trust and Banking Corporation in 2019. At that time, Steinberg was permanently named in the lead role.

Metrics managing partner departs

Metrics Credit Partners managing partner Graham McNamara has advised the board of his intention to retire, effective 31 March 2026.

Metrics said McNamara’s retirement forms part of a “carefully managed” leadership transition plan.

“He will remain fully engaged in the business until his retirement date and will continue in an advisory role thereafter to ensure continuity for investors and clients,” Metrics said.

The board congratulated McNamara on an “exceptional career spanning more than 45 years across banking, funds management and financial markets”.

“As a founding shareholder and managing partner, McNamara has played an important role in Metrics’ success, contributing to the firm’s strategy, growth and reputation since its inception in 2011,” Metrics said.

“His experience and leadership have helped build Metrics into one of Australia’s leading private markets asset management firms with more than $30 billion in assets under management.”

Escala unveils new leadership team

Private wealth group Escala Partners has made changes to its leadership structure as it officially integrated into global financial services firm Focus Financial Partners.

Although Escala joined Focus’ network of independent wealth management firms in 2019, this marks its full integration into the group.

As part of the integration, Escala’s founding partner and former head of advisory Ben James has been appointed chief executive.

Torty Howard, meanwhile, was named chief operating officer, while Simon Dawkins will continue as head of capital markets and fixed income.

It’s also expected that Focus’ chief corporate development officer Travis Danysh will be appointed executive chair of Focus’ Australian businesses.

Grok Ventures sees two executives exit

Grok Ventures - the climate technology investor backed by Atlassian founder Mike CannonBrookes - has seen chief executive Tan Kueh and chief investment officer Jeremy Kwong-Law exit the business.

“Both have played a huge role in Grok’s journey and our mission to decarbonise the planet,” Grok said.

The company thanked Kueh for amplifying Grok’s presence and accelerating the progress of the SunCable project across Asia Pacific.

Kwong-Law was credited for his impact over his nine-year tenure, from unearthing some of the company’s earliest seed deals through to reshaping AGL.

“Investments like these (and many more) show that with the right amount of guts, ambition and capability, we can make real change. Grok remains committed to making bold investments that push us towards a better tomorrow,” Grok added.

Casey Taylor02 , who was appointed chief executive of Cannon-Brookes’ private office earlier this year, will now oversee climate investments at Grok Ventures, climate philanthropy alongside Boundless Earth chief executive Eytan Lenko, and other things under Cannon-Brookes’ umbrella of companies.

First Super deputy chief jumps ship

After four years with the industry fund that serves people in the furniture and joinery, pulp and paper and timber industries, deputy chief executive Michelle Boucher03 has taken a role at REI Super.

REI Super chief executive Jarrod Coysh confirmed Boucher has been appointed group executive of transition and transformation at the superannuation fund for Australia’s real estate industry.

“We are delighted to have an executive of Michelle’s capability and experience joining us to oversee our transition to a new administrator, SS&C and also to accelerate our digital transformation,” he said.

“I’m personally happy to be working with Michelle again and know she will be a great addition to the executive team.”

Boucher has spent nearly two decades in the superannuation sector, holding leadership roles at Cbus and ESSSuper where she focused on marketing, member experience, digital transformation and operational performance.

Bombora names chair, MD

Bombora Advice is welcoming a new chair and a managing director following the departure of founder Kevin Martin.

Wayne Handley will take on the role of executive chair and Niall McConville 04 will become managing director, effective July 1.

Martin served as chair since January 2016 and McConville has been a member of the Bombora board since April 2024.

Prior to joining Bombora in 2023, McConville held roles at the Pro Bono Financial Advice Network, Fidelity Life and TAL Australia.

In welcoming McConville into the role of managing director, Handley said he is a seasoned financial services executive with a proven track record that has spanned two decades in advice, insurance, distribution, and strategy.

McConville said he was delighted to take on the new role.

“My focus will be the next phase of Bombora’s strategic journey that will include enhancing operational efficiency, capitalising on growth opportunities in the life insurance sector and improving both adviser and client experiences,” he said.

Cbus makes key ESG hire

High-profile sustainable finance specialist Camille Wynter has taken on the role of ESG integration lead at Cbus.

She will be part of the responsible investment team and report to Ros McKay.

With over 10 years of experience in sustainable finance, Wynter joins the industry fund serving building and construction workers after a ninemonth break.

Previously, she was the head of ESG research for Australia and New Zealand at UBS, where she led the strategy for these markets. Wynter also previously served as the director of sustainable finance in Commonwealth Bank’s institutional division.

Wynter also spent seven years at AMP Capital as a senior sustainable investment analyst. There, she helped manage the Australian Sustainable Share Fund, led engagements with company executives and board members, and managed proxy voting on behalf of all global equity teams.

“Strong leadership and a shared sense of purpose create the best conditions for impact. I’m grateful to be joining a team and company where those foundations are lived every day,” she stated. fs

04: Niall McConville

03: Michelle Boucher

02:

Casey Taylor

01: Mark Steinberg

CareSuper to overhaul cloud

CareSuper has mandated Macquarie Cloud Services to migrate and recalibrate its cloud environment into a Managed Edge Azure Local offering.

It will consolidate the super fund’s technology estate into a single, scalable platform and will see databases modernised and platform-as-a-service offerings implemented to create efficiencies.

CareSuper said it is about more than cost savings for its 573,000 members.

“Our goal is to optimise every part of our operation so we can deliver long-term value to our members,” CareSuper chief technology officer Simon Reiter said.

“Cloud decisions must serve that mission – not just today, but five years from now. Macquarie Cloud Services stood out as a partner who could deliver both the technical transformation and the ongoing managed service maturity required.”

Macquarie Cloud Services head of Azure Naran McClung said the group is “seeing a wave of repatriation from AWS.”

“For many organisations, rising costs, and architectural limitations have made them re-evaluate. But it’s not just about moving away –it’s about moving forward. That’s where our team adds value,” McClung said. fs

Banned director jailed for contempt

A former company director has received a prison sentence after he was found to have continued to run a financial services business despite having been banned from doing so.

In 2018, Joshua Fuoco was found to have engaged in misleading and deceptive conduct and unconscionable conduct, and to have broken financial services laws. His business was offering cash to vulnerable clients in exchange for sizeable commissions from insurance policies the clients did not want or need but that he forced them to take out in order to access the cash. Those policies were funded via their superannuation accounts, significantly eroding their balances.

He was banned for 10 years from being involved in the running of a financial services business. However, in 2020 he was found to be continuing to run one firm, Financial Circle.

At the time, he was charged with four offences, but in October 2022 pleaded guilty to one rolled-up count of managing a corporation while disqualified. He was convicted in 2023 and fined $6000. He was permanently banned the following year, and ASIC then filed a contempt application in the Federal Court.

Now, Fuoco has been convicted on 18 charges of contempt and sentenced to 12 months’ imprisonment, with Justice Horan saying it was “the most serious incident of contempt of court in recent years.” His sentence is to be suspended for two years, with the judge saying he wanted to give Fuoco “one last chance.”

Between March 2019 and April 2023, he was found to have been involved in five companies: State Advice, Ansa Finance, AFSL Group, About Advice, and Advice Now. All the companies were operating a similar model to that of the business Fuoco was running when banned. fs

01: Damian Graham chief investment officer Aware Super

Aware Super delivers double digit returns

Eliza Bavin

Aware Super has delivered a return of 11.9% for its Future Saver High Growth optionits default MySuper option for under 55s – for the 2025 financial year.

Retirees invested in Aware’s Conservative Balanced option also enjoyed strong performance with the pension option achieving a 9.8% return.

Our younger members have had the benefit of being in the highgrowth phase for longer, enhancing their retirement outcomes.

Aware Super chief investment officer Damian Graham 01 said the performance was testament to the strength of the $195 billion fund’s diversified portfolio and actively managed investment strategy.

“Aware Super members have enjoyed another year of strong returns with our diversified, actively managed portfolio again performing well despite challenging market conditions at the beginning of 2025,” Graham said.

The super fund said global shares were a strong performing asset class, with private equity and infrastructure also delivering solid returns.

Graham also highlighted the fund’s globally diversified portfolio as being pivotal in delivering consistently strong results for members, noting the High Growth option achieved a positive return for April despite big falls on share markets that month.

“Our investments span a vast range of listed and unlisted assets, from technology companies and data centre operators to energy transition

investments and build-to-rent housing projects across global markets,” Graham said.

“We search the world for investments exposed to promising long-term growth trends, including the digital economy, technology innovation, the energy transition, and the ageing population and its need for retirement housing and health services.”

Graham said the fund has been working to create new approaches and options to preserve retirement savings for members as they progress through different life stages.

“Aware Super was one of the first funds to make High Growth the default option for younger members as part of our MySuper Lifecycle approach. Our younger members have had the benefit of being in the high-growth phase for longer, enhancing their retirement outcomes,” Graham said.

“The Conservative Balanced pension is our default and most popular option for retirees. It still invests in growth assets to help their savings keep up with the rising cost of living but balances this with more defensive assets.”

Graham said Aware Super has aimed to cushion the impact markets can have on retiree balances.

“If they lose less when markets fall, their income won’t be as affected, so they can have more confidence that their money will last for longer in retirement,” he said. fs

Pendal, Regnan funds expand controversial weapons exclusions

Jamie Williamson

Pendal has updated the exclusions for three sustainable funds, evolving its stance on controversial weapons.

The Pendal Sustainable International Share Fund, Pendal Sustainable Conservative Fund, and the Regnan Global Equity Impact Solutions Fund now exclude companies directly involved in the supply of goods or services specifically related to controversial weapons.

For the Sustainable Conservative Fund, the exclusion applies to International shares, Australian fixed interest and part of its Alternative investments allocations.

The funds already exclude companies involved in the manufacturing of controversial weapons, and companies that derive 10% or more of revenues from manufacturing non-controversial weapons or armaments.

“In our view, this change ensures that the fund remains true to label and is more closely aligned with investor expectations in relation to responsible investment funds,” Pendal said.

The change was effective June 30 and adds to the

list of exclusions already in place, including tobacco production and extraction or exploration for fossil fuels. The funds also don’t invest in companies that derive 10% or more of revenues from things like the production of alcoholic beverages, pornography, or uranium mining in support of nuclear power. However, companies with a climate transition plan may be exempted from some of the screens. Further, Pendal clarified that in the case of the Regnan fund, it does consider white phosphorous weapons to be controversial weapons.

White phosphorous is used in smoke, illumination, and incendiary munitions, with the white phosphorous ignited by contact with air; according to the World Health Organisation, it is harmful to humans by all means of exposure and can burn all the way through to the skin.

Human Rights Watch and Amnesty International have both claimed Israeli forces have used white phosphorous weapons in Gaza and along Lebanon’s southern border. It’s also previously been used by US forces in Iraq and in Afghanistan, and was used to varying degrees by several armed forces in the First World War. fs

The quote

Feature | Platforms

With the advancement of artificial intelligence, it isn’t exactly surprising platforms have quickly adopted solutions. But what can we really expect from the technology – and what are the risks? Matthew Wai explores.

rtificial intelligence (AI) brings clear advantages across various channels, predominantly on platforms. Examples are seen throughout Investment Trends’ 2024 Annual Platform Benchmarking Report, showing that platforms are adopting AI to strengthen cybersecurity and fraud detection initiatives, machine learning capabilities, and portfolio review for better access insights.

Investment Trends finance and research director Paul McGivern 01 highlights that technology can also streamline the documentation of client interviews, educate and train advisers on certain aspects, as well as create client report content and information retrievals, assist with software development, and more.

“In the 2024 report, we did include some AI-linked functionality, and the participating platforms gained additional points where they have implemented that functionality,” McGivern says (see Figure 1).

“Whilst the impact of AI functionality to their scores in 2024 was very limited, we do expect its importance to grow over the coming years.”

Although limited data may not demonstrate the true level of AI infiltration in the sector, DASH head of product – adviser solutions Terri Ho 02 says history has shown clear indications that those who are slow to adapt to the latest innovations will become the losers.

“History is pretty clear: in every wave of innovationfrom electricity to the internet - businesses that moved either too slowly or too recklessly got left behind. The winners were those who made deliberate, strategic moves grounded in real use cases,” Ho says.

“With financial advice being highly regulated in the way information and advice is delivered to clients, basic use cases like using AI-powered tools for notetaking, meeting documentation, and client communications report saving over 10 hours per week on average. This equates to more than 500 hours per year.”

This also supplements a sector that is currently facing a critical shortage, with only 15,600 financial advisers

Feature | Platforms

and research director Investment Trends

active in Australia. AI can help in many ways, including playing a big part in digital advice for personalised advice as well as customer support.

However, with the abundance of merit comes the underlying threats AI also presents.

“AI is both the biggest threat and the biggest opportunity facing business today. The critical point: this isn’t a passing phase. The tension AI creates isn’t cyclical – it’s structural,” Ho continues.

“The real challenge is learning to operate within that tension and drawing crystal clear lines between where AI replaces us, where it augments human capability – and where we want to preserve and double down on the human elements of our business.

“Whether you’re excited by AI or wary about it, one truth cuts through: economics always wins. The moment a competitor uses AI to lower costs, boost efficiency, or elevate client experience, the conversation shifts. It’s no longer about belief – it’s about economics.”

Holistic solutions

Many, if not most platforms currently used by Australia’s advisers are equipping themselves with the latest AI features.

Still, Mason Stevens chief platform officer Vien Luong03 says there are components of AI that remain insufficient.

Although the firm does leverage AI technologies to some extent, Mason Stevens prides itself on the fact that human interaction still edges over innovation, refusing to use any form of AI in the front office.

“When it comes to more principle-based or a grey area like regulation, Australia is very good at adopting principle-based regulation. AI technology today just isn’t able to provide holistic solutions for that segment, not yet,” Luong says.

“That’s one area I’d love to see advancements in because Mason Stevens’ philosophy here is ‘AI is not going to replace us’ – it is just going to enable and supercharge what we do.”

Mason Stevens operates as an investment platform and a deposit-taking institution that has a superannuation fund, meaning it is regu-

AI is both the biggest threat and the biggest opportunity facing business today. The critical point: this isn’t a passing phase. The tension AI creates isn’t cyclical – it’s structural.

Terri Ho

lated by both ASIC and APRA – and that any use of AI must be stringently monitored.

“We are positioned in the market not only as a platform, but also as a provider of sophisticated investment services – not too dissimilar to an asset management business,” Luong explains.

“Hence, we use a lot of portfolio management and analytics tools internally, and the partners that we’ve used for that technology have rolled out certain AI features to help optimise those processes.”

Although Luong remains unsure about what AI regulation will look like in the future, he believes the firm’s “compliance-by-design” approach puts it in good stead.

“I don’t think anyone is sure where that’s [the regulation of AI across platforms] going to go for now. For us, it’s principle based. We as an organisation have a compliance-by-design mentality; everything we design, every solution we put in place, has a compliance lens – it is not just about ticking a box but to think through what regulations might be coming,” Luong explains.

“If we’re designing a solution, how do we future proof that, regardless of whether AI is involved or not.”

While Mason Stevens is looking to take a more considered approach, others are more gung-ho about capitalising on AI’s capabilities.

For example, Netwealth has overhauled several aspects of its business, following the adoption of AI tools in its platforms business.

“We’ve seen sound adoption and outcomes from AI already within the business and our

contact and service area; we’ve implemented several significant AI projects, which have led to improved customer service, reductions in call waiting times, as well as broader efficiencies within the team,” Netwealth chief executive and managing director Matt Heine 04 says.

“One [aspect] is around that back-office efficiency, and the other half is client-facing technology, where we can create new and different ways of interacting with the platform.

“Ultimately, the more that we can drive efficiency, increase accuracy, and also deliver better services to our customers, it’s a ‘win-win’ for everyone.”

This includes a chatbot that Netwealth is planning to introduce, which has been in development over the past 12 to 18 months.

Netwealth has conducted rigorous testing and Heine says the chatbot, once introduced, will be able to handle well over half of all incoming enquiries before matters need to be shifted to a staff member. This would lift a considerable burden for employees whose time is spent answering and resolving simple issues.

“That’s really important from a chatbot perspective; we’ll be adopting a multi-layered approach, whereby we believe that moving forward, in the next two or three years the chatbot will be able to answer 60% to 70% of all inquiries,” Heine says.

“It’ll be able to answer a wide range of enquiries in real time with high levels of accuracy. However, we also recognise the importance of having the ability for customers to be triaged and directed to a human when help is needed. To make sure that we don’t end up frustrating our customers, we’ll be running AI sentiment analysis over the top of the chatbot interactions.”

Equally, Heine recognises that ethical overlays are critical, and notes that most of his employees are encouraged to learn how to use AI in some form.

“It can be difficult [to measure], because it is being adopted and used broadly across the whole business,” Heine adds.

01: Paul McGivern finance

02: Terri Ho head of product –adviser solutions DASH

03: Vien Luong chief platform officer Mason Stevens

Figure 1. Areas advisers would like to see more AI tools used or introduced

“Some areas are getting much greater benefits earlier given the technologies that we’re working with however, we have a number of medium to longer-term projects and plans which I think will deliver very significant benefits.

“Whilst AI definitely isn’t the solution for everything… it’s supporting more and more automation as well as better customer experiences.”

Legacy troubles

It’s prudent to consider that not every platform is suited to ride the AI wave; sometimes, they may already be too heavily equipped to properly integrate new capabilities in a timely manner.

Avoiding this issue, Elemnta chief executive Shaun Green 05 explains that younger companies are typically on the front foot, compared to their older counterparts, because they often have the right systems in place from the get-go.

“Our work with many financial services institutions highlights how legacy data systems, or stacks, are not ready for the full benefits of AI,” Green says.

“… due to legacy, some more mature institutions don’t have the data foundations in place to allow them to truly leverage the power of AI. They often need help to create clean, better organised, standardised data to deploy AI benefits, and it’s the core foundational integrations work that we are assisting them with.

“I can’t emphasise enough that the back-end data infrastructure inside a platform or institution should be the priority focal point when seeking to unravel historic technology systems built over previous time horizons and at different levels of cognisance regarding the power of properly integrated data.”

This also applies to consumer-focused platforms like Pearler, as it was able to incorporate the latest technologies during establishment.

“We’ve built on the most modern tech stacks available. So, AI has enabled our engineering team to increase our efficiency,” Pearler cofounder Nick Nicolaides 06 says.

“As a modern company, I wouldn’t say that AI has had a material impact yet on back office, because everything in our back office is fairly automated and digital to begin with.

“Within our business, at every level, AI is already driving decision making and it’s not [about] us tearing everything down to insert AI; it’s involved in every decision, whether it’s resourcing, recruiting… and particularly how we are investing marketing budgets.”

As a trading platform, Nicolaides reiterates AI isn’t a “magical black box” for the best investment decisions but a catalyst in searching the most suitable content to learn.

“Rather than focusing on how someone can use AI to pick investments or manage money, we’re [understanding and testing] how it can cut down the decision-making process around how to utilise features like automation, optimising for saving rates, investment frequency, and more,” Nicolaides says.

The trading platform is orientated towards

04:

Matt Heine chief executive and managing director Netwealth

Shaun Green chief executive Elemnta

Platforms | Feature

… due to legacy, some more mature institutions don’t have the data foundations in place to allow them to truly leverage the power of AI.

Shaun Green

younger Australians that tend to be more self-directed.

“AI is putting itself in between that person and the endless world of general content such as blogs, videos, how-to guides, courses, forums, and more,” Nicolaides explains.

“AI is dramatically simplifying and speeding up a person’s ability to find the content… we don’t see AI as creating a new type of content, because people are already happy and used to existing content.

“AI is enabling people to find the content that’s most relevant for them… a young, selfdirected person that wants to learn, wants to be in control and isn’t looking for this magic black box to tell them what to do.”

AI also assists Pearler in search engine optimisation (SEO) and organic forms of distribution, but for material impact he believes the industry needs to wait-and-see how the true benefits are going to play out as business continues to grow.

Detecting threats

As with any other software rollout, it is imperative to understand the strengths, weaknesses and risk factors of implementing AI tools.

Ho says some key risks can include the lack of transparency, security concerns and misinformation and manipulation.

“The rapid growth of AI does mean that laws and policies have not yet quite caught up with providing proper legal frameworks,” Ho warns.

“As such when implementing AI, part of the strategic solution would be to incorporate strict policies around the use of AI, including developing guidelines for responsible use such as vetting AI tools and outlining which tools can be used, how they are used, and steps to protect confidential data.

“Ensuring the risks are well understood is also key, with one of the main risks being trusting AI too much and over-relying on its outputs, hence overlaying its use with a review framework would help manage risks.”

Cybersecurity is also paramount.

According to Green, AI is commonly used to detect security threats.

“Our approach to managing security is, in

a lot of cases, to use AI tools that help in the identification of threats. For example, anyone who’s housing data, important information or financial transactions are literally constantly defending against attempts to break into their environment,” he says.

It is a similar practice at Mason Stevens, where Luong also says AI is an integral guardrail in keeping data safe.

The firm outsources most of its AI capability to third-party service providers, as it aims to leverage mature technologies instead of inventing from scratch.

“There are a lot of AI or technology providers out there and we use a composition of our technology stack from a number of different providers. They aren’t AI specialists, per se, however most technology companies are now researching and developing AI technologies within their existing suite of products,” Luong says.

Its use in scams is also growing.

Green recalls a recent phone call where it took nearly eight minutes for him to realise he actually wasn’t talking to a human.

“It felt a little weird because I hadn’t been able to identify that it was AI; I thought it was a human,” he says.

“… you can see the power of it on what’s going on [with AI] – the rate of advancement of AI technology is faster than any technology in history, there’s no tapering off, which often is the case.”

The lack of disclosure around the use of AI could also prove problematic, and as features like chatbots become more common, examples like Green’s phone call will likely become more common.

Ultimately, the use of AI must be treated with caution, keeping an eye on, and ready to adapt to, any future regulation that may emerge.

“Use of AI to assist advisers in areas such as asset allocation and alignment of client portfolios within managed accounts is likely to have a growing level of importance in future years,” McGivern says.

“Whilst we didn’t see any specific examples of AI impacting advisers use of managed accounts in 2024, we do expect the increased adoption of AI to filter through to many areas of platform functionality.”

Unsure about the future, McGivern believes any changes to platform functionality because of AI, especially those exposed to personal information and investments, will attract regulatory attention.

“We are only just beginning to see the impact of AI in the lives of advisers and in the functionality of platforms. But driven by adviser demand we expect the retail platform market in Australia to be one of the most dynamic areas in investment markets,” McGivern says.

“We are very positive about the future for advisers, their clients and the platform market, and we look forward to showcasing AI’s adoption into platform functionality both now and into the future.” fs

06: Nick Nicolaides co-founder Pearler

05:

Australian Ethical drops fees

Eliza Bavin

Australian Ethical has made changes to its insurance offering to provide Standard Default Cover members with a higher level of coverage at all ages, while also reducing fees for most age groups, while other age groups will see costs unchanged.

From August 1, the $8.9 billion super fund will also change super and insurance fees to ensure the costs of insurance administration are applied only to members with insurance.

Standard Default Cover members will experience an increase in the amount of Death and Total & Permanent Disablement (TPD) insurance cover they receive, while Death and TPD cover for others will become or remain Fixed Cover.

In addition, premiums and fees in relation to all types of insurance cover will change and there will be a reduction to the Administration Fee for Super and Pension customers.

“We’ve worked with our insurer (MetLife) to minimise the cost and complexity of delivering insurance benefits to you,” Australian Ethical told members.

“In working towards our new insurance offering, we have considered the evolving financial needs of our members, and we remain committed to providing appropriate levels of Default Cover along with the built-in flexibility you may need to tailor your own insurance arrangements, at a reasonable cost.”

Changes to the standard age-based Default Cover means members will automatically see their level of cover increase based on their age but will be provided as unitised cover from August 1 and the cost per $1000 of age-based Default Cover will be reduced.

In addition, Australian Ethical said insurance administration costs will no longer be covered by an administration fee in recognition of the introduction of new insurance fees. fs

Prime Value expands fund

Prime Value Asset Management is opening its Prime Value Microcap Fund to retail investors.

Prime Value said the fund is a newly launched retail offering, built on the same investment strategy and managed by the same team behind the former SIV Emerging Companies Fund.

Originally established in 2015 as a wholesale fund designed for Significant Investor Visa (SIV) investors, the strategy will be made accessible to retail investors for the first time under the new structure and name.

The federal government canned the Business Innovation and Investment Program (BIIP), which comprised three major visa streams that provided a pathway to residency in Australia in the 2024-25 Budget, including the SIV.

Prime Value Microcap Fund portfolio managers Richard Ivers and Mike Younger said underperformance in small cap stocks over several years has created attractive valuations.

“Some microcap companies are trading at singledigit P/E ratios with double-digit earnings growth and delivering a good dividend yield,” Ivers said.

“As the cycle turns these stocks are likely to rebound strongly. It will come quickly.” fs

01: Kate Farrar chief executive Brighter Super

Brighter Super default members earn 11% in FY25

Karren Vergara

Brighter Super’s MySuper option achieved 10.9% p.a. for the 2025 financial year, exceeding performance for the medium and long term.

The latest result outpaced the three-, fiveand 10-year time horizons of 10.3% p.a., 8.2% p.a. and 7.2% p.a. respectively.

The super fund earned double-digit returns in eight accumulation and pension options for the 12 months to 30 June 2025.

The quote

This is a great result for members, given the volatility the markets have experienced through the year.

“This is a great result for members, given the volatility the markets have experienced through the year. Brighter Super members have also benefitted from their third successive year of administration fee reductions,” Brighter Super chief investment officer Mark Rider said.

In the accumulation options, Growth delivered 11.7% p.a. while Balanced achieved 10.5% p.a.

Meanwhile, the Indexed Balanced option achieved one of the highest results at 12.2% p.a.

For older members in pension phase, the Growth option made 12.8% p.a. while the Balanced option earned 11.5% p.a.

The Conservative Balanced option returned 10.1% p.a. while the Indexed Balanced turned in nearly 14% p.a.

Rider pointed to investments in domestic and global equities that drove the performance.

“We’re encouraged by the strength of returns over the past year across all of our diversified investment options and more recently the recovery since the volatility sparked by the US trade tariff announcements. Our long-term strategy, which combines active management with broad diversification, is designed to navigate changing market conditions and protect members’ retirement savings and grow over the long-term,” Rider said. Brighter Super chief executive Kate Farrar01 said, “strong returns in the past financial year reinforced the fund’s impressive investment record since the mergers of LGIAsuper and Energy Super in 2021 and the acquisition of Suncorp Super in 2022.”

APRA records show that Brighter Super had $33.5 billion in assets under management and more than 322,00 members at the end of March, ranking it as the 25th largest super fund by member benefits.

“Once again Brighter Super has produced an outstanding investment performance which demonstrates that our members continue to reap the benefits of the mergers through strong returns and among the lowest MySuper fees in the industry,’’ Farrar said. fs

Barings expands into local self-storage sector

Matthew Wai

The asset manager has acquired a majority stake in Swift Storage, committing $200 million in seed investment.

The acquisition includes majority ownership in both the existing portfolio of assets and the operating business.

Swift Storage was founded by USS Funds Management (USSFM) in 2022 and predominantly focuses on contactless, drive up, storage unit estates with zero on-site staffing requirements. It has a property portfolio of 15 purpose-built selfstorage centres.

This marks Barings’ entry into the self-storge sector in Australia, adding to investments in seniors living and operating airports.

It also demonstrates Barings’ continued expansion in the Australian real estate market, having acquired over $2 billion of multi-sector real estate over the past 18 months, Barings said.

Barings senior director private equity real estate Tamara Williams said self-storage has proven to be a resilient asset class with “significant” tailwinds in the future.

“What attracted Barings to this opportunity is the calibre of our Swift operating partners – they have a

proven track record and have pioneered an efficient operating model for the industry,” Williams said.

“Together with our in-house investment management focus and development expertise, we are well positioned to execute on our vision for the platform.”

Barings director in private equity real estate Luke Bryant agrees, adding that the entry complements Barings Real Estate Australia’s growing industrial and logistics portfolios across major markets.

Meanwhile, USSFM co-founder Jonathan Perrins said Swift has achieved immense success over the past four years.

“Swift is now a proven concept that has been well received by customers. It is ready to be scaled into larger centres in major urban and regional markets,” Perrins said.

“Swift’s future with Barings is a great fit alongside their extensive real estate investment and development expertise.”

USSFM co-founder Robert Gregg added: “The investment by Barings in Swift is the culmination of a lot of work by USSFM, advised by MA Moelis Australia, in accessing the capital to fund the continued growth of Swift.” fs

ASIC appoints ASX inquiry panel

Matthew Wai

ASIC has appointed three panel members to conduct its inquiry into the Australian Securities Exchange (ASX).

Leading the inquiry, Commonwealth Bank independent non-executive director Rob Whitfield has been appointed chair of the panel.

He is joined by Christine Holman, currently a non-executive director of AGL and Collins Foods, and Funds SA chair Guy Debelle, who is also a board member of the Clean Energy Finance Corporation, e61 and Tivan.

Commenting, ASIC chair Joe Longo said: “Rob, Christine and Guy bring a wealth of experience in their roles as members of ASX top 20 boards and government investment funds, as well as deep experience across global markets, banking, regulatory, risk and technology.”

“Their depth of experience and skills will be invaluable as we undergo this Inquiry.”

The inquiry will focus on frameworks and practices in relation to governance, capability and risk management within the ASX group, ASIC said. In response, ASX managing director and chief executive Helen Lofthouse assured the bourse remains “committed to supporting the inquiry.”

“This is a wide-ranging inquiry, and it will provide an independent and transparent view of the work we have done, and the work we still have to do. It will be critical to ensuring our stakeholders can have trust and confidence in ASX,” Lofthouse said. fs

Microsoft flips AI switch for MUFG

MUFG Pension and Market Services (MPMS) has collaborated with Microsoft to adopt AI-powered solutions across its MUFG Retirement Solutions and MUFG Corporate Markets business divisions.

The five-year strategic partnership is built on a co-investment model, with Microsoft providing AI capabilities at scale across MPMS operations in Australia, New Zealand, India, Hong Kong and the UK, focusing on key areas in member and investor experience.

MPMS will harness Microsoft’s AI technologies to enhance and automate core superannuation processes, enabling faster, more accurate and personalised support, it said.

The leveraged AI capabilities will also “streamline” investor communications, reduce manual handlings and enable straight-through processing, presenting a more transparent experience for listed companies and their shareholders.

As part of the transformation, MPMS has rolled out Microsoft 365 Copilot and GitHub Copilot to embed AI literacy across its workforce for better efficiency in operation.

All AI and cloud initiatives are built to ensure compliance with data governance, privacy and regulatory requirements across jurisdictions, MPMS affirmed.

It also adds to MPMS’s recent investments in cloud modernisation for better preparation in services for superannuation and investor ahead of the “next wave of transformation”. fs

01: Dan Farmer chief investment officer MLC Asset Management

MLC AM delivers real returns for members in FY25

Karren Vergara

Staying the course on listed equities amid tariff-induced market turbulence has led to MLC Asset Management achieving doubledigit returns for the 2025 financial year and, more importantly, real returns for members, according to its investments chief.

From our process point of view, we still want to keep our equities at least at neutral.

MLC’s High Growth Option returned 10.6% p.a. at the end of May and will likely hit 11% p.a. once the 2025 financial year books close. The Balanced or MySuper options are set to return about 10% p.a. Over five years, MLC’s largest fund, the MySuper Growth option, delivered about 9% p.a. after fees.

MLC AM chief investment officer Dan Farmer 01 told Financial Standard that these are good results for members whose real returns have grown, believing that they might be “positively surprised” with the outcome amidst the tariff threats and geopolitical tensions.

What helped drive the strong returns, he said, was holding onto listed equity weights close to the benchmark over the year, “which doesn’t sound that exciting, but it was actually a challenging year.”

Ultimately, the fund manager decided to take a “neutral” stance on equities, spurred by the Liberation Day turbulence.

In early April, US President Donald Trump unleashed a slew of tariffs that were higher

than what the market was expecting, leaving many wealth managers jumbled on whether to take an overweight or underweight position on equities.

“We turned to our process. Looked at the fundamentals of the businesses in the listed equity space and saw corporate balance sheets are in good health and earnings are robust and the economy remained resilient. From our process point of view, we still want to keep our equities at least at neutral,” he said.

MLC MySuper, for example, mandates a mix of active and passive managers.

“We have about 60% in what we call ‘enhanced passive managers’, which are lower risk quantitative managers looking to outperform by a smaller amount and use quantitative tools to do that,” he said.

“The enhanced passive managers did very well over the year. They tended to have fuller investments in some of the sectors and businesses that active managers found challenging.”

This included fuller weights to the Magnificent Seven and Australian banks.

Farmer added that active managers found it a little tougher over the last 12 months given that some of the sectors were fully valued, thus making it difficult for them to hold and undertake a fundamental approach. fs

Super funds given reprieve from Trump’s ‘Big Beautiful Bill’

Eliza Bavin

Section 899 of US President Donald Trump’s ‘Big Beautiful Bill’ was abandoned after institutional investors expressed concerns over the retaliatory tax proposal.

The announcement was made by US Treasury Secretary Scott Bessent on social media platform X (previously Twitter).

“After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests,” Bessent said.

“Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill.”

Treasurer Jim Chalmers welcomed the news after confirming he had a “productive” conversation with his US counterpart the day before.

“This development on Section 899 is a really welcome one for Australians and for the Australian business and institutional investor community,” Chalmers said.

Section 899 would have introduced retaliatory tax increases as high as 20% on specific income categories, with direct implications for Australian taxpayers earning US sourced income.

Association of Superannuation Funds of Australia (ASFA) chief policy and advocacy officer James Koval said the move was a “welcome step” from the US and added the superannuation sector is monitoring developments closely.

“There’s still a way to go – the amendments need to be made by lawmakers. There are a number of other amendments under consideration,” Koval said.

“This section of the legislation would have changed the risk return profile of investment in the US, which would have been a poor outcome for all involved.

“The superannuation sector has around US$450 billion invested in the United States, the single largest market outside of Australia. This is money invested in US infrastructure, equities, bonds, and other areas.”

Koval added that ASFA has engaged closely with the Australian government on the issue. fs

The quote

The Advisers Big Day Out provides financial advisers with leading presentations, networking and professional development opportunities over a one-day event.

Taking place across multiple cities, advisers can connect with specialist fund managers and hear the latest strategies and trends across a variety of asset classes.

After attending the Advisers Big Day Out, advisers will be equipped with additional market projections, insights and product knowledge, while earning legislated CPD hours for a full-day’s attendance.

REGIONAL 2025

Hobart

Tuesday, July 15

Geelong Thursday, July 17

Frankston Friday, July 18

Cairns Tuesday, July 22

Sunshine Coast Thursday, July 24

Gold Coast Friday, July 25

Canberra Tuesday, July 29

Wollongong Wednesday, July 30

Newcastle Thursday, July 31

Central Coast Friday, August 1

Desktop Broker, Briefcase partner

Matthew Wai

Desktop Broker, part of Bell Financial Group, has partnered with direct indexing platform Briefcase to deliver direct indexing capabilities and institutional-grade ETF model portfolios to financial advisers and wholesale investors.

With direct indexing, investors have direct ownership of their assets through personalised, tax and cost-effective, diversified portfolios. They will have transparency of holdings, trades, cash flows, and tax lots via the Briefcase platform.

Desktop Broker group head of sales Craig Saunders said Briefcase’s technology is an “excellent” addition to its platform.

“Together, we’re giving advisers more choice in how they build and manage portfolios –offering advisers and clients the transparency, efficiency, and control they expect from a modern wealth solution,” Saunders said.

Meanwhile, Briefcase founder and chief executive Josh Persky said the partnership breaks down the custodial barriers that have stifled innovation in wealth management.

“Briefcase is changing the way advisers build portfolios – giving them institutional-grade tools, true personalisation, and full investor ownership,” Persky said.

“We’re making sophisticated, customised portfolios available to a much wider audience – giving advisers powerful tools to deliver more value to their clients.

“Our focus is on building what the investor community not only needs today, but will demand in the future, and this partnership enables us to provide our unique services to a wider range of customers with increasingly diverse needs.” fs

Brite Advisors auditor surrenders

Andrew McKean

ASIC has accepted a court enforceable undertaking from DM Advisory Services principal David Makowa, the auditor of Brite Advisors.

Makowa, a veteran of more than 20 years in practice – including stints at Ernst & Young and KPMG – has surrendered his company auditor registration and pledged to never re-apply, after the corporate regulator uncovered significant audit quality issues in his work.

Makowa audited the profit and loss statements and balance sheets of Brite Advisors, which is now in receivership and liquidation, and provided required opinions for the years ended 30 June 2019 to 2022.

Makowa admitted that he failed to carry out or perform the audits over this period adequately and in accordance with the Australian Auditing Standards.

ASIC deputy chair Sarah Court commented that confidence and trust underpin the role of company auditors and the independent assurance they provide.

“This trust is critical to maintaining the integrity of our capital markets and enabling investors to make informed decisions,” she said. fs

01: Luke Symons chief executive Legalsuper

Legalsuper celebrates double digit returns

Jamie Williamson

Legalsuper expects to close out the financial year with a return of more than 11% for its MySuper product.

The super fund predicts FY25 will see a return of at least 11% for its MySuper Balanced option, while the High Growth option should return about 14%.

numbers

14%

The return achieved for Legalsuper’s High Growth option.

The results come despite a change of chief investment officer at the start of 2025, with Paul Murray resigning after just nine months in the role, later replaced by former Rest investment head Andrew Lill.

As per its most recent holdings disclosure, close to 54% of the MySuper Balanced option is invested in listed equities, while 10% is in infrastructure and 9% is in fixed interest.

Some of its largest equity holdings include Westpac, BHP Group, CSL, Commonwealth Bank, and NAB. Internationally, the fund has most of its exposures via funds offered by State Street and Aikya Investment Management.

As for the High Growth option, about 40% is invested in global equities and 36.5% is in Australian shares.

The equity investments for the High Growth option are broadly similar to that of the Balanced product, but also include sizeable allocations to global companies Sea, AppLovin, and Taiwan Semiconductor

Manufacturing, and Goodman Group and Wesfarmers domestically.

According to Legalsuper’s website, financial year to date, the Growth option has returned 13.5%, Balanced Index achieved 11%, and the Conservative Balanced product has seen a 10% return.

Legalsuper chief executive Luke Symons 01 said the returns are testament to the fund’s diversified investment strategy, which was not distracted by short-term noise.

“We have held our position in the US throughout this period, with the combination of risk-controlled mandates, active mid-cap technology exposures and strategic global equity and sovereign debt holdings delivering high top-quartile performance for our members,” Symons said.

“Our portfolio also retains a highly effective spread across listed and unlisted assets incorporating infrastructure and private equity in Australia and Asia, ensuring we deliver consistently strong returns to members even during these periods of uncertainty and disruption.”

He added that the returns come as the fund records some of its “strongest ever levels of membership growth and customer satisfaction ratings for our highly-personalised member service model.” fs

Average super balance grows to $172k: ATO Statistics

Karren Vergara

The average superannuation balance grew 5% to $172,000 at the end of the 2023 financial year, new statistics from the Australian Taxation Office reveal.

Women had an average super balance of $154,641, while men had $192,119. The median was $54,349 and $68,568 respectively.

Men continue to have higher balances across all age brackets expect for 70- to 74-year-olds, where women have $215,202 and men have $214,749.

The ATO’s breakdown of income tax positions of individuals, companies, trusts, super funds and partnerships shows it collected $577.4 billion in total tax revenue in FY23.

Some 4.2% came from super funds or $24 billion, while individuals contributed the highest with $298 billion or 51.6% of the total.

At 24.2%, companies contributed $140 billion, while 4.4% came from excise tax or $25.4 billion.

At the individual level, the ATO found that Sydney’s Edgecliff, Darling Point, Rushcutters and

Point Piper residents earned the highest average taxable income of $279,712.

Double Bay residents made $255,901 on average while Woollhara residents earned $242,267.

Victoria’s Toorak and Hawksburn topped were the fourth top-earning suburbs with $241,511.

Surgeons continue to be the highest-paid occupation with the 4247 individuals reporting an average taxable income of $472,475 in FY23.

Anaesthetist made $447,193 on average while financial dealers earned $355,233. Chief executives and managing directors were in the ninth spot making $194,987. Financial investment advisors or managers made $191,986.

The Australian Capital Territory gives the highest median amount when it comes to donations of $245, while Western Australians make the biggest donations on average of $11,534.

Companies reported net tax of $140 billion, up 9.2% year on year. The biggest company tax liability came from the mining industry, with the industry’s net tax growing from $42.3 billion to $54.4 billion. fs

The

Regal Partners adds to stable

Jamie Williamson

Regal Partners now owns 50% of Ark Capital Partners, a specialist hotel investment and asset management firm, paying $3 million.

Ark Capital Partners was founded in 2021 by Rahul Parrab and Mark Bullock.

Under the deal, Regal chief executive Brendan O’Connor and Adrian Redlich will join the Ark board alongside Parrab, Bullock and Sarah Townson. Ed Faraguna will serve as chief financial officer of Ark.

Regal said the acquisition marks a notable expansion of its existing alternatives portfolio, and said the strategy is highly complementary to its existing real estate capabilities as well.

At the same time, Regal is splashing $75 million on the Mayfair Hotel in Adelaide, a five-star luxury hotel that will serve as the seed asset for Ark and the Regal Partners Australian Hotel Opportunities strategy.

Some $45 million of the purchase price will be debt from a local bank, and $35 million is to be raised from external investors. The acquisition is expected to complete in August.

“The partnership with Ark represents a highly attractive opportunity for Regal Partners to further extend our existing investment capabilities across the real estate investment sector, supported by an attractive seed asset purchased at a significant discount to prior valuations that we anticipate will have the ability to generate strong risk-adjusted returns for our clients,” O’Connor said.

“We believe it is the right time in the investment cycle to be looking to expand into equity real estate.” fs

Rainmaker Mandate top 20

Given the favourable market dynamics that underpin the continued growth of the living sector, we will look to invest further capital in living across Asia Pacific.

01: Lowell Baron chief executive Brookfield Real Estate

Brookfield to divest retirement living platform

Matthew Wai

Brookfield Asset Management is selling its local retirement home operator Aveo to The Living Company for $3.85 billion.

Brookfield acquired Aveo in 2019 for about $1.3 billion.

Aveo owns more than 10,000 units in metropolitan suburbs across the eastern seaboard of Australia, providing modern residential accommodation and low maintenance lifestyle for “less than half the median house price.”

The retirement platform also partners with the Retirement Living Council and other industry peers to advocate for higher standards and consumer protections across the retirement living sector.

Brookfield Real Estate chief executive Lowell Baron 01 said the living sector remains the “top segment” in the firm’s global strategy.

“Working with the Aveo team we leveraged our operating expertise to significantly transform the business, improving the resident ex-

perience and creating vibrant communities, all of which have led to record sales and occupancy levels,” Baron said.

“Given the favourable market dynamics that underpin the continued growth of the living sector, we will look to invest further capital in living across Asia Pacific.”

Brookfield co-head of real estate Australia Ruban Kaneshamoorthy added: “Brookfield took a contrarian view when we invested in Aveo. We identified a challenged platform that owned great real estate, and this allowed us to execute an operations-driven turnaround.”

“During the past five years, in partnership with the Aveo management team, we invested heavily in the business and executed a business plan that moved Aveo from a platform with a lack of focus and direction to a high-performance, resident-first organisation that is well placed to take advantage of the strong demographic and structural tailwinds underpinning the growth of retirement living.” fs

PERIOD

How MAs empower advisers to stand out and scale up

Steven Tang, head of portfolio solutions, Zenith Investment Partners

M anaged accounts, particularly custom solutions, enable practices to deliver more personalised advice, maintain control over their investment philosophy, and differentiate themselves in the market.

The efficiency benefits of managed accounts are significant. Zenith’s Unlocking Advice Efficiencies in 2025 report found that 92% of them thought managed accounts allowed them to save time on administration.

The report found that advisers are comfortable outsourcing investment management to managed account experts if it means they can spend more time supporting their clients, achieving efficiencies for their practices and differentiating their services.

But that is not the only benefit they highlighted.

The advisers reported significant efficiency gains from adopting managed accounts, with 44% indicating time savings in administrative and research tasks of up to 25%.

Notably, they agreed that managed accounts offered the greatest time reductions, particularly for practices seeking higher operational efficiency.

The report found that 50% of advisers cite investment philosophy as a primary reason for provider selection. With 53% of custom managed account users , reflecting the need for tailored strategies to reflect a practices’ investment philosophy.

As advice practices mature and grow, they typically seek more tailored solutions rather than solely relying

on off-the-shelf options. Custom managed accounts let advisers build portfolios tailored to client needs, including specific asset preferences and ESG considerations.

Overwhelmingly, advisers said the greater efficiencies offered by managed accounts allowed them to devote more time to differentiate their services and provide clientcentric advice, leading to better outcomes for investors.

By integrating managed accounts into their service offering financial advisers says they can deliver a transparent, customised, and professionally managed investment experience, that offers flexibility and personalisation without the risk of sacrificing returns. These obvious benefits for clients lead to greater satisfaction and loyalty.

In recent times, the migration of legacy portfolios, cost concerns, and client preferences for bespoke investments have hindered the broader adoption of managed accounts, but that is gradually changing. While offthe-shelf products dominate due to simplicity and cost-effectiveness, custom solutions are becoming more popular as practices look to stand out.

With 84% of practices saying they expect growth over the next two to five years, there is clear optimism about the future of the financial advice industry.

Managed account providers can help prompt further growth for advice practices by offering technology and tools that streamline investment operations, providing scalable investment management including portfolio

creation, rebalancing, performance reporting and compliance oversight, and enabling advisers to maintain consistent investment solutions for clients, even when transitioning between licensees.

The report also found there was a shift toward tailored solutions for more complex investor requirements. By offering personalised portfolios, practices can develop stronger client relationships by addressing clients’ unique goals and preferences. It can help advisers draw new audiences - for instance to help cater to younger clients by providing tailored investment models like impact investing, they can provide flexible account structures for family wealth management and can leverage digital engagement tools for real-time transparency.

Over coming decades, billions of dollars will be passed down from older to younger generations, and advisers must cater to new client expectations and needs, including tech-savvy, socially conscious investors from different demographics. Managed accounts can assist by offering tailored investment models that align with younger clients’ values, such as ESG or impact investing. But to be successful managed account solutions need to be purpose-built to help advisers grow and streamline their businesses. Managed accounts will become a key tool for

Workplace Super Products Retirement Products

Call for CalPERS misconduct probe

Karren Vergara

A former California Public Employees’ Retirement System (CalPERS) board member is seeking to launch an independent investigation into the pension fund for alleged mismanagement and misconduct and hopes to raise the funds to do so via GoFundMe.

Margaret Brown is seeking support for the independent investigation as she believes CalPERS’s internal oversight “remains limited and the system has been allowed to police itself.”

Specifically, she wants to find out if CalPERS’s investment decisions are truly in the best interests of beneficiaries, whether fees and risks are appropriately disclosed, and if conflicts of in-terest and political influences compromise returns or governance.

Further, Brown is asking if beneficiaries, legislators, and taxpayers being misled about the health and sustainability of the pension system.

The target amount for the raise is set at US$350,000.

Brown recommends that Ted Siedle, a forensic expert on public pension mismanagement and corruption, take the lead on the investigation.

A former SEC attorney and the founder of Benchmark Financial Services, Brown said Sielde has conducted more than US$1 trillion in forensic investigations of retirement plans and his work has “led to sweeping reforms and recoveries across the country.” fs

Macquarie buys up UK wastewater

Matthew Wai

A consortium led by Macquarie Asset Management (MAM) will invest an additional £655 million, bringing the total equity investment by MAM-managed funds and co-investors to nearly £3 billion, into Southern Water, a UK water and wastewater service provider.

Macquarie Group is the majority owner of the utility company.

In addition to the £655 million, the consortium has the option to provide a further £545 million, totalling up to £1.2 billion.

The investment will help fund Southern Water’s investment program in the 2025 and 2030 regulatory period, which will see around £4000 per household of investment in the water and wastewater network and services.

It will also help steer Southern Water’s turnaround plan, which has made good progress including a ~40% reduction in pollution incidents, a ~80% reduction in customer complaints, and other areas such as water leakage and sewer flooding which are now top quartile.

MAM has separately supported Southern Water in reducing its legacy holding debt, improving financial resilience in response to the credit rating downgrades of the UK water framework in recent months, MAM said. fs

01: Kate Misic acting chief investment officer TelstraSuper

Major airport lands TelstraSuper as new investor

Jamie Williamson

TelstraSuper is making a strategic investment in New York’s John F. Kennedy International Airport as it undergoes a major redevelopment.

The quote

We believe this investment will deliver resilient returns for our members while contributing to the future of global transport infrastructure.

JFK Airport is being transformed, with a US$19 billion project currently underway, including US$15 billion of private investment. As part of it, Terminal 6 is being redeveloped to deliver a “modern, world-class terminal experience with a focus on sustainability, innovation, and enhanced passenger services” over 1.2 million square feet.

The $27 billion super fund is investing an undisclosed sum in the redevelopment of Terminal 6 by way of Investcorp Corsair Infrastructure Partners (ICIP), the controlling shareholder of JFK Millennium Partners (JMP), which is the project company for the redevelopment. Vantage Group, which is a capital deployment platform wholly owned by ICIP, currently operates Terminal 7 and will operate Terminal 6 upon completion.

In all, the Terminal 6 redevelopment is set to cost about US$4.8 billion. It involves expanding and modernising existing terminals, streamlining roadways, and new retail and dining experiences.

As one of the world’s busiest airports, TelstraSuper said the investment in JFK will deliver long-term value for members.

“We are excited to be investing with Investcorp Corsair in a globally significant infrastructure

project,” TelstraSuper acting chief investment officer Kate Misic 01 said.

“This investment aligns with our long-term approach and our commitment to supporting essential infrastructure that connects people and economies.”

She added that the fund is proud to be part of a consortium that “reflects both global expertise and strategic alignment.”

“We believe this investment will deliver resilient returns for our members while contributing to the future of global transport infrastructure,” Misic said.

Meantime, Investcorp Corsair managing partner and Vantage Group lead director Hari Rajan welcomed TelstraSuper as an investor.

“We are delighted to welcome TelstraSuper to the JFK Terminal 6 investment,” he said.

“TelstraSuper’s involvement reflects the global appeal of this landmark project and the strength of our shared commitment to building inclusive, sustainable infrastructure.

“We look forward to working closely with TelstraSuper and our other partners to deliver a terminal that sets a new standard for airport design and functionality.”

JFK Airport currently sees more than 60 million passengers a year, employs close to 150,000 workers, and generates more than US$33 billion in sales. The redevelopment is expected to add a further 15,000 jobs. fs

State Street Global Advisors rebrands

Eliza Bavin

State Street Global Advisors (SSGA) has announced its new brand name: State Street Investment Management (SSIM).

SSIM said the rebranding highlights the firm’s focus on growth and engagement with clients and partners, and its commitment to product innovation, in service of creating better outcomes for investors and the people they serve.

“Today marks a new chapter in our story –one that reflects our values, honors our rich heritage, and brings our vision for the future into sharper focus,” State Street Investment Management chief executive Yie-Hsin Hung said.

“Our new brand underscores our mission of investing in our clients as they invest in the markets, delivering tailored solutions, and prioritising partnerships.”

In developing the new brand identity, State Street said it conducted research and “solicited input and feedback from clients, investors and employees around the world”.

State Street said the update puts a stronger focus on its “One State Street” approach which aims to enhance collaboration across State Street Corporation and expand its offerings.

“State Street Investment Management is an essential partner to investors, offering them unparalleled expertise, unique insights, and both innovative and cost-effective solutions,” SSIM chief marketing officer John Brockelman said.

“We’re excited to unveil a new brand that communicates that promise. These changes to our brand strengthen our value proposition, simplify the way we go to market, and improve our clients’ experience across State Street.” Hung added that the word “investment” means more to State Street than just capital markets and explained why it was included in the new name.

“As a firm, we’re investing in our relationships, investing in innovation and investing in the future,” Hung said.

“We’re helping secure better outcomes for our clients, and we’re pleased to present a new brand name that reflects this.” fs

Trade war may be a positive: PC

New modelling from the Productivity Commission (PC) in its annual Trade and Assistance Review (TAR) shows that proposed US trade policy measures will have a marginal direct impact on the Australian economy, but the risks and uncertainty they bring may have far reaching costs.

The PC’s report found that continuing to advocate for free and open trade and looking for opportunities to lower tariffs would be our best responses to changes in global trade policy.

“Australia’s prosperity has been built on free and open trade. The proposed tariffs are likely to have a relatively small direct effect on us, but the global uncertainty they’ve brought about could affect living standards in Australia and around the world,” PC deputy chair Alex Robson said.

“Uncertainty is a handbrake on investment –when businesses are uncertain about the future, they are less likely to invest.”

When omitting the impact of uncertainty, the modelling found that the proposed US tariff changes could have a small, positive effect on Australia’s economy.

The results suggest that cheaper imports from the rest of the world, and an outflow of productive capital from the US and highly tariffed economies, would slightly increase Australian production.

For example, US ‘Liberation Day’ tariffs and tariffs on aluminium, steel and automobiles and parts could lead to an increase in Australian real GDP of 0.37%. fs

The quote

While consumer spending remains stubbornly weak, the labour market remains strong.

01: Michael Malakellis senior economist KPMG Australia

RBA holds interest rate

Eliza Bavin

The Reserve Bank of Australia (RBA) kept interest rates on hold at 3.85% at the July meeting, surprising many experts and the markets which were anticipating another cut.

The RBA board confirmed that inflation has continued to moderate but ultimately decided the bank “could wait for a little more information” to confirm inflation is on track to be sustainably in the target range.

KPMG senior economist Michael Malakellis01 said the central bank’s caution was understandable.

“There is still significant uncertainty in the economy and that is holding back household expenditure and businesses investment. This sentiment won’t change overnight, and lower interest rates alone may not be the answer,” Malakellis said.

“It’s a difficult balancing act for the RBA –they would love to give households and businesses a boost, yet the labour market remains resilient and inflation risks, while lower, still exist.”

Betashares chief economist David Bassanese said the decision perplexed market expectations but was in line with his forecasts.

“As I expected, the RBA decided to leave interest rates on hold – completely confounding market expectations...” Bassanese said.

“While consumer spending remains stubbornly weak, the labour market remains strong. And while the recent monthly CPI report showed a large decline in annual trimmed mean inflation to 2.4%, monthly reports are notoriously volatile,” he said.

Bassanese said as the RBA awaits further CPI data towards the end of July, the August rate decision is still up for debate.

“Assuming annual trimmed mean inflation in the June quarter CPI report is no more than 2.7% - and hence close to the RBA’s forecast of 2.6% - I fully expect the RBA to cut rates at the August policy meeting on August 12. I expect they will then follow up with a rate cut at the November policy meeting following the September quarter CPI report,” he said. fs

Financial Standard economics and investment

Sector reviews

Australian equities

FY25 done and dusted

Pooja Antil

S&P ASX 200 delivered 13.8% for the financial year 2024-25, an outperformance of 1.7 percentage points on the previous financial year.

This was the third consecutive year of positive returns for S&P/ASX 200. The index has had only two negative annual returns over the last 10 financial years.

The annualised returns over longer periods were 13.5% pa over three years, 11.85% pa over five years and 8.8% pa over 10 years to June 2025.

The trailing PE ratio at the end of June 2025 was 18.99x, trailing above its long-term average of 14x, indicating expectations of future growth.

Given that S&P/ASX 200 is the headline index, its strong financial performance demonstrates that most of the underlying sectors also performed well. It is worth noting that while six sectors outperformed S&P/ASX 200, eight out of 11 sectors delivered a positive financial year return.

S&P/ASX 200 returns were largely underpinned by outstanding performance from Financials, one of the biggest components of the headline index. S&P/ASX 200 Financial recorded the highest return of 29% for the financial year.

One can’t talk about financial sector without

mentioning Commonwealth Bank of Australia, that beat BHP to become the largest company by market capitalisation on ASX. CBA’s share price at the end of the financial year was $184.8, up from $127.4 at the beginning of the year, an increase of 45%. However increased volatility and fears of overvaluation still linger around.

The performance from the second and third biggest sectors of materials and healthcare was disappointing. The material sector returned -2%, while healthcare lagged further behind with a return of -5% for the financial year.

The fourth biggest sector of consumer discretionary was also the fourth biggest earner of the year with a return of 21%.

But much of the heavy lifting was done by smaller sectors like communications with financial year returns of 28%, followed by the technology sector returning 24%. Industrials recorded a financial year return of 19% while REITS returned 14%.

The lowest returns for the financial year came from the Energy sector (-8%) as Australian resources and energy exports softened due to rising trade barriers resulting in negatively impacting world economic activity. fs

International equities

Tale of two halves

Sanjesh Pinnapola

As the 2024/25 financial year wraps up, equity markets delivered strong returns, and even bond markets both at home and overseas shed their lacklustre form, delivering 7% and 5% returns respectively.

On the whole, the scorecard will show (with all returns in AUD terms) that the MSCI All Countries ex AU index returned 19.1% over the 12 months to June. The S&P 500 fared well but slightly lower and returned 17.4%, the MSCI Emerging Markets 18.2%, MSCI Europe 8.6%, and the MSCI Japan 2.6%. For comparison, the ASX 200 delivered 13.8% for the financial year.

Beyond the surface, there was nuance to these returns.

Take the first half of the fiscal year. Those six months saw the S&P 500 surge 17.0%, MSCI All Countries 14.9%, emerging markets 8.2%, the ASX 200 6.9%, while Europe and Japan actually contracted, 1.2% and 0.3% respectively.

The next half, over 2025, has a very different story.

Over these six months MSCI Europe led the pack, returning 10.0%. Emerging market continued to rally, returning 9.2%, the ASX

200 6.4%, and 3.7% for the All Countries index. Japan staged a more modest recovery, ending with a 2.9% return. The S&P 500 was at the back of the pack, returning just 0.3% over six months.

It is worth noting that these figures are in AUD terms. In USD, the S&P 500 returned 6.2%, slightly behind the ASX 200, pointing to the US dollar’s deteriorating position more so than raw market performance.

Therein lies the bulk of the source of volatility in much of 2025. The Trump administration’s rapid escalation of tariffs globally in April followed by an equally rapid retreat in the form of a 90-day pause when markets responded poorly. Originally, this pause was slated to end on July 9 but the administration’s inability to close trade deals has seen the pause recently extended.

Adding fiscal instability is the One Big Beautiful Bill, which the non partisan Congressional Budget Office estimates will add US$3.3 trillion to the US deficit over 10 years. It has been criticised for focusing tax cuts on the wealthiest 20% of the population and deteriorating the already precarious debt to GDP ratio to in excess of 130%. fs

Source: Rainmaker/CoreLogic RP Data

Source: Rainmaker/CoreLogic RP Data

Figure 2. Market index returns H1 vs H2 FY25

Figure 1. Global market returns FY25

Figure 2. Australian sector financial returns 2024-2025

Figure 1. S&P/ASX 200 FY returns 2016-2025

Prepared by: Rainmaker Information Source:

Prepared by: Rainmaker Information

Source: Rainmaker Information

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MEASURED GROWTH

Second time was the charm for Simon Glazier in his bid for the managing director role at Fidelity International’s Australian outfit. Now in the top job, he isn’t banking on the investment giant’s past glories to keep it firing. Andrew McKean writes.

Simon Glazier grew up in Emu Plains, Western Sydney, where he’d tear around on his BMX and tried his hand at just about every sport under the sun. Life was peachy back then, he says, with nothing taken too seriously, his schooling included.

As such, Glazier left high school without a clear game plan. He initially took a stab at graphic design, but landing a job proved to be about as easy as trying to nail jelly to a wall.

Glazier chipped away at unpaid briefs for around a year and a half in the hope of cobbling together a portfolio that might open a door. In the end, his labour – not to mention the actual labouring gigs he grafted at on the side to keep afloat – bore no fruit.

In hindsight, though, Glazier’s grateful those doors never budged. That’s because he scored a job in the Mercantile Mutual mail room. It wasn’t exactly a gold-plated dream job, scanning and sorting papers, but eventually nabbing the chance to lead the team gave him his first glimpse behind the curtain of “the wonderful world of funds management.”

From there, Glazier moved from the firm’s mail room to its bustling call centre. He says it was a “great experience,” engaging with investors and advisers, adding that he came away wiser from learning “who’s ringing, why they’re ringing, and what they’re ringing about.”

Despite learning a lot, the job was far from a cakewalk, especially while balancing marriage, kids, and an accounting and finance degree at Charles Sturt University, which he undertook as the realisation grew that the industry held the promise of a lasting career.

After Mercantile Mutual’s integration into ING and its subsequent joint venture with ANZ, Glazier moved to beverage giant Lion Nathan for a brief tenure and later joined Perpetual.

Glazier started in client services at the wealth firm before stepping into distribution as a business development manager, working on the investments side of the business.

Glazier looks back fondly on his Perpetual days, loving the youthfulness and energy of the sales team, but client seminars during the Global Financial Crisis (GFC), fielding fire from rattled investors pointing fingers and grilling him about plummeting balances, was intense.

He says, “people didn’t know who to blame,” but riding out the storm side by side meant “the relationships we built in that team were really strong.”

After over five years at Perpetual, Glazier jumped ship to Colonial First State (CFS) for a second foray into funds management distribution, spurred by a conversation that revealed an alignment between its needs and his strengths. And he figured why not, after all, “change is as good as a holiday,” he says.

At first, Glazier’s focus was on advisers not yet

using FirstChoice, but it was a later pivot into leading a platform sales team that, he says, sharpened his understanding of the links in the chain of the wealth management ecosystem.

Glazier’s next career move saw him go to specialist investment manager Ellerston Capital, which he describes as “at the pointy end of Australian corporate heritage.”

He says, “I wasn’t just a distribution guy there,” but rather in a “more specialist role,” which, he adds, unfurled access to deeper asset class know-how and more direct tightknit work with Ellerston’s investment team.

By the end of his time at Ellerston, Glazier had been around the block long enough for his name to surface at Fidelity, which came knocking in its hunt for a head of wholesale sales.

“I wasn’t really interested at the time,” Glazier admits, but curiosity got the better of him.

Glazier saw a meeting as a chance to stresstest his distribution strategy to see if his approach held water in the eyes of a global player. To his delight, the feedback was positive, and as he learned more about Fidelity – both locally and offshore – the more he saw it as an opportunity worth considering.

“As cool as Ellerston was, my thinking shifted to: as a leader, where can I go, what can I do, and where will provide me with the best opportunity,” he says.

Ultimately, Glazier joined Fidelity, and after a few years, made a strong case for the managing director role, narrowly missing out in his first attempt. Undeterred, he focused on building his relationship with global leadership team, who he says are wary of choosing an unfamiliar candidates. By the time the role reopened last year, he was the clear choice.

Fidelity has been “really successful” thanks to its sharp leadership and strong products across retail, adviser, and institutional segments, Glazier says. The challenge for it now, however, is pinpointing the portfolio building blocks clients will ride with going forward.

“We’ve been extremely successful in Australian equities on behalf of others for over 22 years – that’s how long our fund’s been around – but people’s preferences for having a manager manage their equities has changed, and we haven’t responded to that until now,” he says.

Fidelity will stick to its DNA and fundamental research, he says, but how it delivers Australian equities and other asset classes may shift to match these evolving preferences.

The big change, he says, has been meteoric rise of passive investments, with investors, more costfocused than ever, using them as portfolio ballasts, and complementing them with concentrated, high-conviction, alternatives, or more recently, private assets in the pursuit of better risk-adjusted returns over time.

“If you go back 10 years, paying a manager over 100 basis points to run Australian equities

I could write down our fiveyear strategy, but unless we have the culture to deliver it, it’s useless.

was pretty normal. That’s not the case now. The expectations have changed,” he says.

Outside of Australian equities, which make up about 70% of Fidelity’s locally domiciled funds under management, the firm’s seen success in areas like emerging markets, Australian mid-caps, and Asian equities. The gap, though, is in broad-cap global equities – a major piece of adviser-led portfolios and institutional client strategies, he notes.

Oddly enough, however, he says recent market surveys show that Fidelity’s brand has serious clout in global equities, which is interesting because, as he puts it, the firm doesn’t have “a category-killing global equity franchise.”

But there’s still time, and as for what matters most within the business, for Glazier it’s the culture.

“With recruitment, people and the culture is the most important thing. I could write down our five-year strategy, but unless we have the culture to deliver it, it’s useless,” he says.

Still, the hiring process is “massively tricky,” he says, particularly trying to find the right fit in a matter of weeks, with the hope of a working relationship that lasts a decade.

Glazier adds that he’s equally dedicated to backing the people already in the room, committed to empowering his team to stretch their wings and rise to new challenges.

The beauty of fostering strong talent in this industry, he says, is that what’s developed locally can be exported, just as what’s developed offshore can be brought in. fs

Simon Glazier

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