With about A$3.2 trillion under management – which will hit about A$5.2 trillion by 2030 – this will continue to increase as mandatory Super contributions increase over time. Given its size, the sector can support our economy in times of need – as we saw with the early release of Super, helping recapitalise entities on the ASX as well as the continued and significant investment in infrastructure.

There is a significant appetite to invest in our collective future – and this means Super and investment funds can help shape the future by investing in renewable energies, and help drive the ESG agenda. Government can also play a key role in incentivising funds to help make this happen.

Industry funds are consolidating and the banks are divesting their wealth businesses, creating a new and emerging environment. Together with choice, we’re seeing large and small providers compete for the same members, making competition fierce and healthy.

This is challenging at a time when we’re anticipating interest rate increases which could impact investment returns. Historically, looking at returns over the last decade, a typical balanced fund returned an average of 7.2% per annum, and a growth fund 9.0% per annum (according to Chant West). The question is, how will funds continue to generate decent returns in our changing macro environment?

Australia as a nation is getting older, and there will be significantly more people moving from the accumulation to the retirement phase over the next 10 years, and the sector needs to develop better retirement products and solutions to meet the needs of retiring Australians.

 In the wake of the Hayne Royal Commission and COVID-19, we have witnessed regulatory and performance scrutiny, resulting in providers looking at new ways to become more resilient and responsive to changes whilst conducting business as usual. Technology is playing a key role in this necessary transformation but clearer and simpler regulations could also enable better innovation.

This is what investors, members and consumers want, and the providers who get this right will find it easier to differentiate and compete. To win in digi-enabled personalisation and good advice, providers need to conduct regular research to understand what is most appealing, and most important, to their target members. For example, brands like Spaceship and Superhero have found ways to cut through to younger Australians, building loyalty through tailored, engaging experiences designed specifically for them.

Unless we are able to open up advice to more Australians we will not realise the promise the sector could deliver. This will need innovation, changing business models including self-service advice and regulatory change to truly achieve the potential to help all Australians.

And the best way to earn the former and achieve the latter is by having a clear value proposition, reliable performance, low fees, strong advice quality and using scale effectively to benefit consumers.

We can expect to see continued improvement in the next five to 10 years. We will continue to see more competitors enter, and that’s a really positive thing for members, and for the economy. We can expect to see M&As, tech-driven transformation, and increasing exposure to overseas investments as funds continue to offer diverse member portfolios. But for all of these changes to achieve the best outcomes, we need clear government policy over the medium and long term.