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Meg Heffron is the co-founder and head of product at Heffron SMSF Solutions, one of Australia’s leading independent administrators and education providers for self-managed superannuation funds. Meg is a recognised leader in the SMSF industry and talked to Six Park head of communication Erika Jonsson about the business she founded with her husband, Martin, 20 years ago.
What was the first thing you saved for, and how long did it take?
A holiday – I was the eldest of three girls and the only one who had a job, and I really wanted to take my sisters skiing in New Zealand. They were still at school. It took months! I was just out of university and completing my cadetship as an actuary.
What exactly is an actuary? What led you into this career path?
An actuary uses mathematical skills to quantify risk in many different ways. When I was starting out, the key applications for actuarial skills were in superannuation or life insurance, where the job was to set funding rates (for super funds) or premium rates (for insurance). Now those two fields employ far fewer actuaries – they’re now more often found in other forms of insurance and investing. Actuaries aren’t necessarily statisticians, but they will apply new knowledge about statistics to a business to give you a financial outcome.
Right up until I filled in my preferences for university, I was planning to become a maths teacher – then my high school maths teacher told me I didn’t have to teach maths to do maths, and that actuaries did maths all day long. Suddenly I had an alternative way of doing what I loved so I put it down for uni without really knowing what an actuary was.
What influenced you to open your own business?
When my husband and I started our careers in the ‘90s, most employers had their own super funds – that’s now almost all been rolled into industry and retail super funds. My job involved being the actuary to companies that had their own funds – advising them how much they needed to contribute each year to cover the benefits they had promised their employees. I also helped trustees to comply with the law and Martin did a similar thing. We’d had enough of city living, so we left our jobs in Sydney and headed off around Australia in a Landcruiser Troop Carrier. We came up with our business plan on that trip. We wanted a country lifestyle with the benefits of the city, and Maitland fit the bill perfectly.
We refined our broad superannuation expertise into what are now known as SMSFs. Back then (the late 1990s) very few people specialised in SMSFs and so they were poorly understood and often treated as the boring bit of an accountant’s practice.
The only disappointing thing about my current job is that there isn’t a lot of maths anymore.
When we started the business it became more important to be able to design the service, sell it and manage the team that delivered it – it started getting less “mathsy” at that point. But there’s always a way to bring something you love into your work. My role now is much more legal – understanding the law and how it applies to superannuation – but because of my background, every new piece of law is an excuse to break out a new spreadsheet.
How many staff does Heffron now employ?
We employ about 80 people across Maitland, Brisbane, Sydney and Tamworth. We never envisaged it being that big – we thought it would be us and a couple of support staff. Then we realised there was going to be no chance for holidays! We started getting bigger as the SMSF industry was getting bigger.
It’s been estimated that almost 60% of Australians don’t know how much they have in superannuation. Does that surprise you?
It doesn’t, really. It depresses me, but it doesn’t surprise me. Both sides of politics are keen to put the boot into SMSFs, but most people with SMSFs are probably part of the 40% that know a lot about their superannuation, because most SMSF trustees are naturally very engaged with their super.
What are the most important steps people can take to improve their super situation?
It’s tempting to say it starts at school, but financial education doesn’t seem to be having a lot of impact yet. I think it would help a lot if people realised that super is their money – most people don’t think of it that way. There seems to be this mindset that because you can’t spend it immediately, it isn’t yours. But if you tell people that for every $10 they earn, almost $1 is put away for them, they think of the $9 as theirs and the $1 differently. In fact, it’s all THEIR money, it’s just that they don’t get to spend their super until retirement.
You’re based in Maitland, in NSW’s Hunter Valley. How has your location helped or hindered Heffron’s development as a business?
It’s helped in some ways – in the Hunter region, which is half a million people or more, there’s one obvious employer for people who want to work in superannuation, whereas if we were in a capital city we’d have to compete with a lot more employers. We have a lot of really talented staff who choose to come and work for us because they don’t want to be in the city. It hinders because very few of our clients live in the region, so face-to-face meetings almost always require travel, but that’s become less and less of an issue over time. We’ve always had off-site staff and invested in technology that allows us to have people in different locations.
Self-managed super funds were in the spotlight at times last year for the wrong reasons during the Banking Royal Commission. Is there a silver lining for trustees?
The Royal Commission happened because there was a groundswell of concern over what some of the biggest institutions are doing with people’s money. The extent was probably a surprise. I don’t think I expected it to be as bad as was revealed. I think it’s been good for us as a society to see the ugly side of putting profits ahead of customers at both a business level and a personal level – the Royal Commission has painted that picture very vividly. The approach that involves putting customers first to drive profit looks really different. The silver lining for trustees is probably that a lot of people will change their behaviour.
What was your first experience of investing?
I set up my SMSF in 1997 with $40,000 and no adviser, and my investments went backwards – that was when I got an adviser. I learned that, while an SMSF made sense for me from a future planning point of view, investment wasn’t my thing so now I get help with that.
Six Park partners with Heffron to offer an end-to-end SMSF administration and investment management service. For more information, click “SMSF setup” at the top of the page.