New research indicates consumers rate fees as the most important factor when choosing a superannuation fund, at a time when changes to disclosure rules may be making fee reporting less reliable.
Asked what mattered to them most when selecting a super fund 74% of those surveyed said fees were either extremely important or very important, followed by 64% answering history of returns and 60% investment flexibility.
The survey was conducted by UMR and commissioned by Industry Super Australia – which has been arguing for a delay in the change to fee disclosures which came into effect on 1 October 2017.
The survey sounded a warning about the new rules, according to
According to Industry Super Australia public affairs director Matt Linden the survey sounds a warning about the new rules, which he said promise transparency but would render opaque the fee disclosure by some super funds.
“Australians are quite right in focusing on what they’re being charged and what their superannuation is earning,” said Mr Linden.
“Consumers can have confidence that differences in net returns provide a solid indication of the investment strategies and the effect of the all up costs of a super fund,” he said.
“Unfortunately with fee disclosure there is no simple and transparent way of comparing fees on various products across the entire system.”
Industry Super Australia says the exclusions under the new rules for investment platforms could result in consumers being misled.
“Australians shouldn’t have to fear that product providers are potentially gaming fee and cost requirements; or be forced to pour through multiple disclosure statements just to be sure,” Linden said.
“As the financial watchdog, ASIC needs to get these fee disclosure rules right for all Australians.”
Technology came last in terms a ranking of most important factors. The Financial Services Council – which has been at odds with industry super funds over the default super system – recently criticised default MySuper funds for not adopting enough technology.
The survey of 1000 people aged 18 and over was conducted in September.