News & Analysis

Australian supers urge GPs to bolster transparency

Six of the country's largest investors have signed an open letter calling on asset managers to adhere to a code of conduct, in a move to 'rebuild confidence.'

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A group of Australian superannuation funds have signed an open letter calling on asset managers to adhere to an ethical code of conduct.

The six funds – Australian Ethical, Australian Super, First State Super, Kinetic Super, Sunsuper and VicSuper – signed CFA Societies Australia’s open letter late last week. It asks asset managers to adhere to standards set out in the CFA Institute Asset Manager Code.

“It’s a great initiative – my view is that, post-global financial crisis, it’s important for investors to operate with high levels of transparency and integrity,” First State Super chief investment officer Damian Graham told sister publication Agri Investor.

“[Initiatives like this] will foster more confidence in the sector, and I think that did take a dent during the GFC.”

Mr Graham said that First State Super deals with a large number of asset managers that operate with high levels of integrity, but that signing up to a code of conduct would help other investors, and the general public, identify managers that operate in a like-minded fashion.

“We have to ensure the integrity of the system is underpinned – particularly now we’ve got to the point where superannuation in Australia is larger than the economy itself, and is such an important provider of long-term capital,” he said.

Out of the 1,471 firms listed on CFA’s website as having self-identified as complying with the CFA Institute Asset Manager Code, only 28 are Australian. They include IFM Investors and QIC.

The code sets out the ethical and professional responsibilities of asset managers, and states that they should act in a professional and ethical manner at all times, for the benefit of clients, with independence and integrity, and with skill, competence and diligence. It also calls for signatories to communicate with clients in a timely and accurate manner and to uphold the rules governing capital markets.

“The letter is especially relevant in Australia with its unique mandated superannuation system, which makes every single Australian an investor and creates an even greater moral imperative for asset managers to adopt the code,” said Stephen Dunne, chair of CFA Societies Australia’s advocacy council.