The Australian Council of Superannuation Investors (ACSI) has claimed that the proxy advice reforms recently announced by the Morrison government could have a “detrimental impact” on the financial outcomes of super fund members.
Under the reforms, proxy advisors will be required to be independent of their institutional clients from 1 July 2022.
The ACSI is currently owned by its 34 members, including Australian and international asset owners and institutional investors such as Australian Super, QSuper and Aware Super.
“The Treasurer’s changes would see superannuation funds that manage money on behalf of millions of members denied independent advice on the performance of the companies they invest in,” said ACSI chief executive Louise Davidson.
“Overwhelmingly, investors have supported the provision of quality independent advice. These proposals are not in the interests of millions of Australian superannuation fund members.”
Ms Davidson said that ACSI had strengthened the investment outcomes for millions of Australians over its 20-year history by providing independent advice on financially material issues to super funds.
She said the announcement of the reforms by Treasurer Josh Frydenberg on Friday (17 December) followed “a process lacking in any transparency” that included refusing to engage with proxy advisers.
“Pushing through regulations with no consultation just before Christmas undermines the principle of transparency that the Treasurer claims to uphold,” said Ms Davidson.
“No case has been made for the regulations. This appears to be a deliberate attempt to sidestep the parliamentary process to avoid proper scrutiny and is an insult to the Senate and millions of superannuation fund members.”
ACSI said it had never voted on behalf of its members and did not include them in the process of developing recommendations.
It is one of the four firms that dominate the proxy advice market, which the government described as “highly concentrated” in a statement on Friday.
“Proxy firms exercise significant influence by advising institutional investors on positions to take in respect of resolutions put at company meetings,” the statement said
“This includes advising superannuation funds, which collectively own around 20 per cent of the Australian Stock Exchange (ASX) worth around $510 billion. It is therefore important that proxy advice is transparent, independent and its quality and accuracy can be relied upon by investors and companies alike.”
