Top Menu

Intrust Super urges members to ‘play the long game’

Intrust Super CEO, Brendan O’Farrell.

Leading accommodation, tourism and hospitality industry superannuation fund, Intrust Super, is urging caution among members in the wake of COVID-19 and its impact on markets and industry.

In a statement provided to HM, the company says the unprecedented impacts of COVID-19 and the lack of clear solutions could lead people to make detrimental financial decisions.

Intrust Super CEO Brendan O’Farrell said the impact of COVID-19, coupled with particular Government policies, was a dangerous mix that could result in vulnerable people making bad personal decisions.

“The hospitality industry has been hit hard. Many of our members have lost their jobs or significant portions of their incomes. Many of our business clients have had to make heartbreaking decisions. And many hard workers in the industry will now be forced to make some very difficult decisions.”

While he commends parts of the Government’s stimulus package, O’Farrell feels the early release of superannuation initiative was not as well thought out.

“The new Job Keeper initiative will help many businesses keep employees on – that’s a fantastic initiative. Expanding the eligibility for income support payments to individuals, speeding up the process and increasing the payments are also fantastic stimulus initiatives.

“We hope members take advantage of these, and other payments, wherever they are eligible. Businesses and individuals should also speak with their landlords and their bank managers about relaxing loan repayments or rental payments.”

The Australian Stock Market has taken a battering from COVID but will rebound in time.

O’Farrell was less enthusiastic about the early release of superannuation initiative.

“Historically, in an economic crisis, the Government spends public money on stimulus measures, often directed to those most vulnerable, to assist them through the crisis and get the economy spending again.

“The early release of superannuation proposal will basically force many vulnerable workers to bail themselves out, using their own money. This could cost members dearly in the long term, not to mention force many of them to withdraw their savings when unit prices are low, with Funds selling their assets in a down market in the short term.

“This will relieve financial pressure on people, which is good, and will get them spending now, which is also good. But it simply brings forward spending and reduces the national retirement savings pool, increasing Age Pension dependency in the future. In any case, we really feel for those who are faced with these tough decisions.”

O’Farrell offered some optimism for the future of the industry.

“The special ingredient with the Hospitality Industry is its innovative ability to come out stronger from the other side of a crisis. This has been proven numerous times before and I have no doubt when we come out the other side, we will be thinking differently while providing the sensational service that the industry is renowned for.”

Prosperity will return to the hospitality sector in the near future, says Intrust Super.

On the market front, O’Farrell said switching investments now would risk selling low and buying high once market conditions returned to normal levels.

Global market downturns in 1987 and 2008 saw the All Ordinaries Index crash by more than half, however losses were eventually recovered. O’Farrell said the $64,000 question was trying to predict when the falls would bottom out and begin their recovery.

“This means that switching investments when markets are falling risks crystallising losses by selling low. Your investment may not benefit from any market rebound if you switch to a low-risk option at this stage.

“Sticking to a strategy and continuing regular investments through a volatile market means your ongoing contributions will be buying assets at increasingly favourable prices. While not guaranteed, this strategy is more likely to deliver increased returns as markets recover,” O’Farrell added.

As governments around the world reacted to the COVID-19 situation, the business community will adjust and the path to recovery will become clearer as time goes on. Economy activity will return, investors will become more comfortable and prosperity will return.

In recent weeks, Intrust Super has invoked its Business Continuity Plan, to ensure key functions and service delivery is maintained. Client and member consultations and support services will take place exclusively via phone and other electronic services such as Zoom for the time being. Face-to-face meetings with clients and suppliers will resume once authorities deem the practice to once again be safe to do so. Relationship Managers have also been appointed to address any questions or concerns held by members amongst a cluster of clients and industries.

, , , , , ,

Comments are closed.

Powered by WordPress. Designed by Woo Themes

Check-in with HM Magazine’s email newsletter

Stay in touch with the latest news and features from the accommodation and hospitality sector, with HM Magazine’s twice-weekly newsletter delivered straight to your inbox each Wednesday and Friday.

You have Successfully Subscribed!