If there is one thing Local Government Super (LGS) CEO David Smith would tell his younger self, it is to continue with tertiary education rather than head straight into work. “I wish I made time to study earlier on,” David says. “I was 27 when I completed my undergraduate degree, which I did part-time with a young family. I had the exciting opportunity to study my MBA in Boston, so the family moved to the US. I was 37 when I finished it.”
Looking back
David has been in financial services for 40 years, beginning with his first job at Westpac, then known as the Bank of New South Wales. After rising up the ranks at Westpac, David held a number of positions at the NRMA, State Insurance, Zurich Financial Services and Axis Specialty. He set up his own consulting business, Equip Corporate Advisory, before he took up the position of CEO of LGS in 2017.
David Smith serves as chair of the Children’s Cancer Institute for medical research in Sydney.
As he looks back on his career, David ponders what else he could have been if he had not gone down the financial services path. “I started a Master’s Degree in Law,” he recalls. “If I hadn’t gone into financial services, I probably would have been a lawyer. I love the law. You mount an argument and back it with precedent and fact. That, to me, is a noble pursuit. The other thing I wanted to be was a pilot.
“I haven’t regretted going into financial services at all. It’s worked out very well and I am happy with the path I took”. LGS began in 1997 as a superannuation fund for current and former Local Government employees in New South Wales. It has since opened its doors to people in any industry in Australia. The Fund currently has around 90,000 members and manages more than A$11 billion in retirement savings.
Attribution of success
In 2017, LGS celebrated 20 years of operation and David attributes its success to its employees. “Many people have been here for a long time,” he says. “There is a wonderful culture at LGS with everyone working together toward the same goal.”
“The staff are fully committed and they feel they can make a difference to the retirement outcomes of our members. It would be very easy to be just a super fund and do the administration, but these people really care. It is something quite special that I haven’t always seen in the various big corporates that I’ve worked for.
“The staff are wonderfully committed and they feel they can make a difference.”
“We have a team of financial planners and client relationship managers who do an excellent job for our members by providing both general and comprehensive personal advice. We also have an in-house member services centre that provides help over the phone as well as via live online chat. We are extremely proud of the services we provide and that we do not outsource these important touch points to someone else, as so many others do today. Our focus is to always provide the best possible member experience.”
LGS is recognised as a leader in responsible investments and has investment restrictions that limit its involvement in companies that take part in high-risk or controversial industries. This includes businesses that generate revenue from tobacco or controversial weapons.
Future plans
“Our Investment Committee has a strong mandate about what we will invest in and, importantly, what we will not invest in,” David says. “We run very strong filters over our investment portfolios and what our asset managers are up to as well. We recognise that we have to get good returns for members, and we do that. We outperform our benchmarks, but we also hold true to our beliefs.”
“Our investment committee has a strong mandate about what we will invest in and, importantly, what we will not invest in.”
“When we’re looking at investments, we’re not only just looking at the environmental aspects,” David adds. “We look closely at the overall governance aspects as well. What are your labour standards? How are you treating your workers? What are executive bonuses and remuneration based on?”
When the Fund conducted market research, it found that its members truly value the environmental, social and governance principles it adopts.
By 2021, LGS aims to manage A$15 billion in retirement savings and David is excited about the future plans. “We have been strategically reviewing our offering outside local government and that makes things at LGS even more exciting. We’ve got a value proposition that is very hard to replicate.”