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The first 30 years: Super's biggest changes

Choice of fund, shrinking investment horizons and the sheer size of the super industry have been pinpointed as the biggest changes of the last 30 years.

In a panel discussion on day two of the Australian Institute of Superannuation Trustees ASI Conference, AustralianSuper's Mark Delaney, Hostplus chief investment officer Sam Sicilia and Frontier director of consulting Kim Bowater were asked to reflect on three decades of compulsory super.

In doing so, Sicilia highlighted the introduction of choice of fund and, to a lesser extent, choice of investment strategy as the single biggest change seen during that time.

"What happened was the exact opposite of what they [the federal government] anticipated, and that was massive flows from retail funds into industry super," he said.

"And I think that was the beginning of the end... the end of the story for retail funds started when they introduced choice of fund, and I think it's been uphill for industry super since then."

Meanwhile, as an asset consultant, Bowater argued that the uplift in regulatory pressure in recent years has changed the way in which investments are dealt with.

She said that when she started out in the space about 20 years ago, investments had a long-term focus, were concentrated on the best outcomes for members and were able to achieve strong results because of the portfolio put in place with that long-term perspective.

"Changes like those that Sam [Sicilia] mentioned, as well as subsequent ones like the heat map and performance test have created an increase in peer focus. It was always there but it is much more heightened and so is the focus on the survival of a fund, and that's all putting pressure on a narrowing and shortening of the investment timeframe," Bowater said.

"This makes the challenge of investing in super much more difficult because I think there's a lot of competing priorities now. They can deliver good outcomes, but I think it's a harder task than it has been in the past."

For Delaney, the single biggest change is the sheer size of the industry.

"If you go back 30 years, it was tiny and pretty much irrelevant to capital markets, how society operated, to social change; it's just huge now and it wasn't like that when I started out," he said.

"Thirty years ago, [industry] funds were under $1 billion each, just coming out and investing in capital guaranteed products... It's enormous now and it will only get bigger."

Financial Standard is the official media partner of AIST's Super Investment Conference for 2022. Click here to subscribe to AIST's newsletter.

Read more: AISTAustralian Institute of Superannuation Trustees ConferenceAustralianSuperFinancial StandardFrontierHostplusKim BowaterMark DelaneySam Sicilia