Warm congratulations BTW for calling them industry funds, not union funds as they are widely but inaccurately characterised by those who would love to see them all wound up.

I am irrationally biased against unions but I have never heard this term being used! Nor do I have anything against industry funds (happily, irrational biases are capable of being moderated, in humans) – I am a member of one.

But I do find a lot of sympathy for this view of the funds-management industry. So much of it appears to be just a cheap scam. The only actively-managed money I have is the very little I try and manage myself, and I think about 5 per cent of my super that my industry fund allocates to an semi-active manager in (I think) global industrials (or something like that).

Other than that the rest is index funds, cash and corporate and government debt. I am even more irrationally biased against paying someone to do a job they ate almost as likely to screw up as get right as I am against unions.

But the trick is a great one – it builds on that great human fear that someone else is getting a better deal. It will probably never go away.

Shouldnt a product like that be available to Australias workers? To some extent it is via industry funds.

I would have thought that answers your own question – why only ‘to some extent’? I’m not sure if all industry funds are open to any worker (I believe they have to be now but haven’t checked) but certainly enough are to give people a choice. Leave it to them IMO, better than setting up a state-run fund that will inevitably pose moral hazards for future generations of politicians (shares in a cross-city tunnel, anyone?).

Warm congratulations BTW for calling them ‘industry funds’, not ‘union funds’ as they are widely but inaccurately characterised by those who would love to see them all wound up.

I guess there are investors who are not eligible for membership of a super fund because they are not employed but if there is sufficient demand for the product Woolley describes, it will surely be provided by the private sector. If it needs some sort of hidden subsidy from government to be viable then I don’t understand the justification for it.

The cranks are out in force again I see.

JC has his faults but that’s not a very nice thing to say about him

The Paul Woolley Centre for the Study of Capital Market Dysfunctionality.

Sounds like the subsidary of the heart foundation

What do you understand he’s trying to achieve with a GDP based bond, Nic.

I cant see why he seems to have a problem with financial services having a large share of corporate profits. I think banks fees etc. are far too high and the banks are living high off the hog while not having to work hard to make their returns. But I see this as a result of regulations creating large barriers to entry.

However there are other arguments. The west has got wealthier and with wealth comes the demand for financial services. Money managers and private bankers once focused only on the permanent aristocracy that sat around and clipped coupons. The stock market is now available even to the office clerk through their super.