Proposed changes to the disclosure of super funds fees, costs and investment return could make it “nearly impossible” for Australian to make informed decisions about their superannuation, Industry Super Australia has claimed.
“The new federal Government proposals carve out bank-owned super funds held through platforms and some legacy products from having to disclose details on ‘dashboards’,” said Industry Super Australia (ISA).
“Product ‘dashboards’ are designed to provide consumers with a standardised and simple presentation of fees, all underlying costs, risk and net returns.”
“The proposed changes mean many bank-owned super products will not have to disclose many of their underlying investment costs.”
At the end of 2014 72% of retail superannuation assets, worth $572 billion, were held through platforms, according to ISA, pointing to analysis by Rainmaker.
“Currently, there is no obligation on the platform providers which form the majority of the choice sector to disclose underlying costs to consumers, the market generally, or APRA,” said ISA.
“Australians need to be able to compare the net performance of super funds to be able to make informed choices”, said David Whiteley, Chief Executive of Industry Super Australia.
“It is unsurprising that the banks oppose having to disclose the performance of their super funds in an easily comparable and transparent manner. According to SuperRatings, industry super funds have outperformed bank owned super funds over the short, medium and long term to 31 December 2015.”
Industry Super Australia recommends that the product dashboard regime cover should “cover all choice superannuation products and investment options, with no exemptions.” However the same ISA report calls for exclusions from the Portfolio Holdings Disclosure requirements for “direct and unlisted property, infrastructure and private equity.”
Industry Super Australia is also critical of the Government trying to expand super choice while limiting the disclosure of information which people would need to make an informed choice between funds.
“The ability to choose a superannuation fund must be accompanied by providing consumers with the tools to compare the performance and features of super funds. It is clear that these propositions are inextricably linked,” said ISA.
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