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

Who's next? Discounts on LICs force managers to pivot

The boards and managers of six high-profile LICs, frustrated by their shares trading at large discounts to asset value, have embarked on radical strategies to fix the problems. Will they work?

Four simple things to do right now

Markets have recovered in the last six months but most investors remain nervous about the economic outlook. Morningstar analysts provide four quick tips on how to navigate this uncertainty.

Three retirement checks for when you have enough

Not every retiree needs to gun for higher returns, but a conservative portfolio can court its own risks, especially with bond rates so low. But some retirees prefer to settle for a lower income.

How the age pension helps retirees cope with losses

It's often overlooked how wealthier couples can fall back on the age pension if a market loss hits their portfolio. The reassurance is never greater than in a financial (and now epidemic) crisis.

Have stock markets become a giant Ponzi scheme?

A global financial casino has been created where investors ignore realistic valuations in the low growth, high-risk environment. At some point, analysis of fundamental value will be rewarded.

Interview Series: Why it’s gold’s time to shine

With gold now on the radar of individual investors, SMSFs and institutions, here's what you need to know about the choices between gold bars, gold ETFs and even gold miners, with Jordan Eliseo. 

Latest Updates

Weekly Editorial

Welcome to Firstlinks Edition 377

The most significant change in asset allocation by Australian investors in recent years has been the move into global equities. It's been a canny trade for those who focussed on the US, especially great companies such as Apple, Microsoft, Amazon and Google. International equities experienced net inflows into ETFs of $722 million in August 2020 versus only $181 million for Australian equities. 

  • 30 September 2020

The elusive 12%: is superannuation at a turning point?

Such is the concern among unions and Labor about Government plans to undermine superannuation that an 'Emergency Summit' was called this week, and pioneer Bill Kelty evoked a social commitment.


My lessons from five decades of investing

As she retires after 47 years of investing, Claudia Huntington explains the art rather than the science of the trade, the value of a great leader and culture, and the insights she gives to new colleagues.

SMSF strategies

The impact of our marriage breakdown on our SMSF

Even if a marriage ends amicably, there are complications when partners share an SMSF. You can't simply 'split' the assets on a handshake, and who takes the capital gains and what's the impact on an estate?

Investment strategies

The future is always clearest once it is in the past

It's one of those times when a case can be made that the market is expensive on some measures, but reasonable on others. Better to do what the great companies do: instead of guessing the future, they create it.

Investment strategies

Emerging markets: Should I stay or should I go?

For long-term investors, the most important factor driving returns is the price paid to acquire a stock. Emerging Markets stocks exhibit favourable valuations on both an absolute and relative basis.


20k now or 50k later? What’s driving decisions to withdraw super?

The amount of retirement savings withdrawn under the Superannuation Early Release Scheme has surprised many. This comprehensive survey of thousands of members of Cbus explains their motivations.


The surprising resilience of residential housing and retail

With a pandemic, a recession and high unemployment, there's every reason to expect residential property and retail sales to be collapsing. But data shows both are resilient, so what is happening?



© 2020 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 class service prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, has been prepared by without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information. 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.