Parametic managing director, research for Australasia Raewyn Williams believes the super industry is innovating way too incrementally.
Describing herself as an "agent provocateur" to delegates at the Australian Institute of Superannuation Trustees Super Investment Conference, Williams said that the industry is far too predisposed to congratulating itself for taking baby steps.
She said: "Respectfully, we can talk about innovations like illiquidity premia and moving up the risk curve, but is that really innovation? We talk about moving into smart beta, but smart beta has been around for decades. What took us so long?"
Part of the problem, she argued, was catering too heavily to the needs of a fund's existing member base. Rather than thinking about the needs of future or prospective members, funds have focused entirely - if indeed they have focused at all - on protecting current strategies.
"A lot of funds have gone bust this way. We have to be careful of how much we give our ear to current members, instead of future ones," she said.
"The price of failure is really high, but if we're not considering new ideas it's even higher. We have to think beyond current investment paradigms, especially in an environment where we're moving from growth to yield."
Returning to smart beta as an example, Williams said that the general sentiment around implementing it was: "The trustees have signed off on our smart beta approach. It's great that we're so innovative."
Instead, she said, funds should be asking themselves why they didn't do it sooner, whether it's an opportunity to redefine risk "as something different to a tracking error," whether it can be used for asset classes other than equities and the possibility of moving to an after-tax investment approach.