As I write, I’m sitting in a huge but almost empty conference room on the Gold Coast, Australia. The clatter of contractors dismantling booths and displays and the background noise of the Australian Sky TV news programme trying to make sense of the latest Brexit shenanigans in Westminster is drowning out the noise of spectacular thunderstorm raging outside. I have been at the Conference of Major Superannuation Funds (CMSF) where AHC have been exhibiting. It’s one of the largest congregations of Super Funds in Australia, with over a thousand industry delegates responsible between them for managing in excess of Aus.$ 2.7 trillion (£1.45 Trillion) of pension fund assets.

For readers less familiar with the Australian Superannuation industry, it has recently been rocked by two separate and high-profile reviews; The Royal Commission, which has been front-page news and uncovered significant misdemeanours, and the Productivity Commission, which has taken fire at several funds which are inefficient or have appalling fund performance. The net effect is significant change is coming; in terms of customer practice, regulation, and industry consolidation.

Listening to the delegates was enlightening but also slightly depressing. Whilst some organisations get the magnitude of the situation, for too many there is an industry version of the Kubler-Ross change process going on. Only a few organisations have been singled out for public humiliation, and the rest of the industry is caught somewhere between shock and denial, with some of the funds that escaped a public shaming feeling falsely reassured that they’ve dodged the bullet. Others do recognise a problem but are looking for somebody else to blame or fix the problems for them, not unlike the UK banking crisis where denial meant the industry was too slow to react. “Look over there” will soon give way to a painful reality check closer to home as governments legislate, regulators find their muscles, consumers and the electorate vote with their feet. Many will be forced to consolidate to survive.

The most telling seminar of the week was on purpose and culture, which seems to me to get to the heart of the matter. Shundrawn Thomas, from Northern Trust Asset Management in Chicago, quoting Edmund Burke, put his finger on the issue “for evil to succeed, it is only necessary for good men to do nothing”.   

His point was that the root of the red faces of the Australian Superannuation or UK Banking industries was not primarily a failure of regulation, governance, or remuneration policy. It was a failure of company and industry culture where good people forget their core purpose and come to accept bad practice as normal or acceptable.  

Are there parallels for us in the UK? At the moment we don’t have the same level of front page scrutiny of our practices, but perhaps we have some tell-tale signs that all is not well; the CMA investigation, the rise of pension scams, Amber Rudd’s threat of tougher jail terms, suspicions of poor advice around pension transfers, and the fact that there is a sizeable, underfunded group of fellow citizens sleepwalking to a unexpectedly poor retirement. Could all this be the cultural canary in our mine? At AHC we have always campaigned for more clarity in communication and culture in all the markets in which we operate. The lesson from the much-admired Australian Superannuation industry is that we need to act sooner rather than later to call out behaviours and practices before the regulator, or the Daily Mail, ever feel the need to.