Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 244

A chat with Chris Cuffe at ‘Women in Super’

“Everyone wants to fix the system, that to me, isn’t broken.” This was Chris Cuffe’s assessment of the default superannuation system at a recent Women in Super lunch held at Sydney’s Doltone House.

At the packed event, the former Chairman of UniSuper and one-time head of Colonial First State shared his views on superannuation and the wider financial services sector in a Q&A style session.

Topics covered included:

Default super system: I’m a convert

Cuffe admitted that if you’d asked him a decade ago, he would have said he was philosophically opposed to the default system, where those who don’t deliberately choose where their super funds will go have them deposited in a predetermined fund. But having been a director of an industry fund for over 10 years, he is now a convert.

“The default system has created monoliths (like UniSuper) which have achieved great economies of scale which have brought costs down significantly, provided very good service to their members, and achieved solid performance.”

Unwinding of vertical integration: the merit of ‘banks just being banks’

When discussing how a number of banks and large financial institutions had acquired an array of different companies, from funds management to financial advice to insurance, Cuffe said he wasn’t surprised to see some of these unwind. According to Cuffe, the customer experience from these services varies significantly and not always in a positive way. The customer experience can depend on returns from investment markets, or the ‘fine print’ of a policy document or underwriting conditions, or the experience of the staff member servicing the customer. Banks have big, delicate brands that need to be carefully protected to maintain trust.

These varying activities do not sit well together, and the profit contributions of non-bank financial services are relatively low compared to banking. Cuffe said that banks slimming down their operations was logical so they can focus on ‘just being banks’.

Internalisation of funds management: consistency is key

Another hot topic was the decision of a growing number of industry funds to internalise funds management in an attempt to deliver further value for members. Cuffe believes this can work for those with the right scale.

“Once you are large enough there is no reason why you cannot employ your own people with the same skill set as external fund managers. It’s about turning a variable cost into a fixed cost … leading to lower costs as the funds continue to grow.”

Past performance is in fact a good indicator of future success

Cuffe holds a common-sense point of view of past performance over long term cycles as an indicator for future success. Many people, particularly regulators, say you should not rely on past performance when making an investment, but it is an important indicator of the skill level of a fund manager.

Should industry funds be compelled to have independent directors?

Cuffe said the issue has never been about independent directors, but more about the skill set. Many industry funds are very large, with billions of dollars under management, thousands of members, complex administration systems, insurance and financial planning services and extensive superannuation laws to comply with. They are some of the largest organisations in Australia. The board of directors should comprise individuals who are experienced in those fields. Such experience is unlikely to be found within the employers/employee representatives of most funds.

Does A.I have a place in financial services?

When thrown a curve-ball question around artificial intelligence, a philosophical Cuffe responded: “We have to ask ourselves – where is the end-game and who will hold the power?


Susie Bell is a Partner and General Manager at Honner.


Reply to Peter: Why a glide path makes sense, with equities for growth

Five challenges for post-retirement products

Grattan’s Super Savings flawed but essential reading


Most viewed in recent weeks

Unexpected results in our retirement income survey

Who knew? With some surprise results, the Government is on unexpected firm ground in asking people to draw on all their assets in retirement, although the comments show what feisty and informed readers we have.

Three all-time best tables for every adviser and investor

It's a remarkable statistic. In any year since 1875, if you had invested in the Australian stock index, turned away and come back eight years later, your average return would be 120% with no negative periods.

The looming excess of housing and why prices will fall

Never stand between Australian households and an uncapped government programme with $3 billion in ‘free money’ to build or renovate their homes. But excess supply is coming with an absence of net migration.

Five stocks that have worked well in our portfolios

Picking macro trends is difficult. What may seem logical and compelling one minute may completely change a few months later. There are better rewards from focussing on identifying the best companies at good prices.

Six COVID opportunist stocks prospering in adversity

Some high-quality companies have emerged even stronger since the onset of COVID and are well placed for outperformance. We call these the ‘COVID Opportunists’ as they are now dominating their specific sectors.

Let's make this clear again ... franking credits are fair

Critics of franking credits are missing the main point. The taxable income of shareholders/taxpayers must also include the company tax previously paid to the ATO before the dividend was distributed. It is fair.

Latest Updates


10 reasons wealthy homeowners shouldn't receive welfare

The RBA Governor says rising house prices are due to "the design of our taxation and social security systems". The OECD says "the prolonged boom in house prices has inflated the wealth of many pensioners without impacting their pension eligibility." What's your view?


Sean Fenton on marching to your own investment tune

Is it more difficult to find stocks to short in a rising market? What impact has central bank dominance had over stock selection? How do you combine income and growth in a portfolio? Where are the opportunities?


D’oh! DDO rules turn some funds into a punching bag

The Design and Distribution Obligations (DDO) come into effect in two weeks. They will change the way banks promote products, force some small funds to close to new members and push issues into the listed space.


Dividends, disruption and star performers in FY21 wrap

Company results in FY21 were generally good with some standout results from those thriving in tough conditions. We highlight the companies that delivered some of the best results and our future  expectations.

Fixed interest

Coles no longer happy with the status quo

It used to be Down, Down for prices but the new status quo is Down Down for emissions. Until now, the realm of ESG has been mainly fund managers as 'responsible investors', but companies are now pushing credentials.

Investment strategies

Seven factors driving growth in Managed Accounts

As Managed Accounts surge through $100 billion for the first time, the line between retail, wholesale and institutional capabilities and portfolios continues to blur. Lower costs help with best interest duties.


Reader Survey: home values in age pension asset test

Read our article on the family home in the age pension test, with the RBA Governor putting the onus on social security to address house prices and the OECD calling out wealthy pensioners. What is your view?



© 2021 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.