At the 2016 SMSF Association National Conference, Andrew Gale was appointed as the organisation’s new chair. Gale explains to Darin Tyson-Chan the importance of initiating better dialogue on issues such as post-retirement and the role SMSFs can play in overall national prosperity.
The appointment as chair marks how many years of involvement with the SMSF Association?
Formal involvement, four years, so I’ve been on the board since March 2012. I’ve had prior involvement in terms of participation in national conferences, including presenting at some of the plenary sessions. I got more actively engaged with the association when I was chief executive for Count Financial, given the make-up of the practices within the Count Financial Group and its very strong involvement in the self-managed super fund sector.
Was becoming chair of the industry body a goal of yours?
The main focus with the association and the board is to attract high-quality directors, which they’ve always done and continue to do. I think naturally if you strongly believe in what the association does, where it can make a difference, and its lead role for the industry and advocacy, that leads to a desire to contribute as best you can so, obviously, that leads to the chairman’s role.
How helpful will your role as vice-chair for the past two years be for your new position?
Both the vice-chair role and involvement with the board committees gives you a strong interest in public policy matters. By virtue of being in the vice-chair role you’re naturally strongly engaged, but the same thing could be said for the people on the board committees. So both of those things will equip you well.
Have you flagged any areas you need to address as chair immediately?
The rigour of the approach we follow in the association means there is full board involvement in the strategic planning process, so it’s fortunate I’m becoming chair in the period in which we’ve got the 2016 to 2020 strategic plan. That’s been done with full and strong engagement between the executive team and the board. As such, my role as chair should be one of ensuring continuity. It means my focus as chair is to champion the things in the strategic plan and, more broadly, make sure the association is strongly focused on providing leadership in the SMSF sector. That should ensure the SMSF Association is the peak body in the sector, is the organisation that leads in terms of research, thought leadership, advocacy, professional standards and education. Philosophically I think we need to continue to promote the message that it’s essential for the sector to control its own destiny to an even greater degree. People often look to government or regulators to take particular actions, but if we want to have high integrity in the various financial services sectors, including the SMSFs, it is much better for us to be taking a lead role.
Was there a handover process with outgoing chair Peter Crump and did he alert you to anything that needs urgent attention?
There is a handover process from one chair to the other, but having said that if you’re intimately involved in the business and the board, as I have been, there’re absolutely no surprises there. You take on some additional responsibilities as chair and a medium-term focus of the role is ensuring very strong governance. That means having and continuing to ensure having a higher-performing board with very strong directors, a sound strategic planning process and sound financial management.
Is reviwing the existing committees part of you role and are there any areas for new committees to examine?
As an association we’ve been through that review process and amended the committee structure somewhat; not dramatically. To that end, the chair has a key role, in conjunction with the chief executive Andrea Slattery, to make sure the structure of the committees makes sense, they’ve got clear charters and we have the most appropriate people on them. We are placing an even greater focus on public policy matters, which have always been a key area of focus for the association, just in terms of the mandate of the charter for the public policy committee. The nature of some of the issues we want looked at requires greater discussion. There’s all the important regulatory and technical issues which need to be addressed and get addressed very well, especially by the association, but I think the industry and the country needs to have a much richer discussion, debate and narrative about medium to long-term policy.
What are the sort of items you feel need addressing?
It means addressing what a sustainable superannuation and retirement income system really looks like. How do we properly address these views around sustainability and adequacy and overall integrity and equity in the system? How do we get a much greater focus on issues in the post-retirement sector? We’ve had a system that has been strongly oriented in the main to the accumulation phase, but there’s a significant shift occurring to the post-retirement sector just reflecting demographics. That’s a really big issue for the SMSF sector because if you look at the prospective fund flows, a very large portion of those are occurring there. So we need to determine what a coherent, cohesive set of post-retirement policies look like and the interaction they will have in terms of retirement income settings, social security settings and tax settings. There’s a much richer debate to be had there. Also, in a public policy sense, a big issue for our sector is just recognising the role of the superannuation system overall and the contribution of SMSFs to national prosperity. That doesn’t get a lot of active debate and I think it’s something that is probably underappreciated. There is a real contribution the SMSF sector makes to the broader national prosperity debate. Equally we are starting to turn our minds, and there’s more research and thought leadership to be evolved, to issues around infrastructure and innovation in particular. So if we look at how to broaden Australia’s future national prosperity, part of it is going to rely on infrastructure requirements and a challenge will be how those infrastructure initiatives can be funded in a responsible way that recognises risks, liquidity issues and the like. There’s a general belief that as a sector we could be making a more meaningful contribution in that area.
Are there any areas of development for the SMSF Association membership?
One of the things we can be looking at is different pathways. So if people are aspiring to be a specialist, we will be exploring ways in which we can do that which are complementary to the education and information services perhaps provided by their licensee if they’re a financial adviser. It means assessing we can provide interim forms of education and accreditation which is a pathway through to specialisation, including things like the graduate certificate program. So I’d say that the key area of focus within the members is just identifying how can we enrich some of those pathways rather than just saying there’s only a limited model in which they can apply. The discussion will include working with industry associations, major licensee groups and the accounting fraternity to see how it can be delivered.
The SMSF Association has entered the trustee space as well now. What would you like to achieve there?
Our overall focus and passion is ensuring higher standards in the SMSF sector and high integrity in the system. We’d like to assist where we can in ensuring trustees are aware of their obligations, key issues to look out for, identifying those areas it might be advantageous for them to be contacting a professional adviser in one form or another. So our initial focus is around a broader-based information service which raises the level of awareness of SMSF trustees and starts hopefully providing a valuable information service to complement those provided by others.
What do you think will be your biggest challenge as chair in the coming 24 months?
There are quite a number of challenges. One of the more significant ones is just working out what the migration path would be with the Parliamentary Joint Committee (PJC) inquiry, which occurred around professionalism, education and ethics in the financial services sector overall. That means setting up an infrastructure for doing that, the role of a professional council, what rules to have for new people coming into the sector as advisers, what rules and parameters to have for assisting advisers and what the transition path looks like. That’s going to be one of the more challenging issues not only for us, but for a whole range of people in the industry, such as industry associations, licensee bodies and the like. There’s a lot of important detail still to be worked through.
Ultimately what would you like to achieve in your time as chair?
It’s not so much what I’d like to achieve personally as chairman, but what I’d like the organisation and the board to achieve. We would like to see sound medium to long-term public policy, which is well informed by proper research and thought leadership across all the public policy issues I’ve mentioned. So, it’s how can we ensure that whole process around policy formulation is as sound as possible rather than knee-jerk policy creation. The whole area around professionalism and standards is incredibly important, especially as we go on that journey of the PJC recommendations and the new education frameworks we’re bringing out. The third key area of real focus and what I would consider would be a measure of success would be to keep proving we are a professional organisation here to serve our membership, to both lead and serve our members. So, I’m very keen that we’ve got very strong engagement with our professional members, that we’re responding to their needs, that we’re highly engaged, and that we’re highly rated in terms of our service delivery. That’s an absolute key performance indicator for us.
