Super fund fees up 10% in last year, faster than growth in assets

Total superannuation fees are growing faster than superannuation assets, up 10% in the last year, Rainmaker Information has found.

Total super fees were $32 billion, up from $29.1 billion in the previous year, says the firm. The average super fund member is paying 1.23% in fees in 2018, compared to 1.17% in 2017.

ASIC fee disclosure rules hit not-for-profit funds

The firm said the annual increase in headline fees was “largely attributable” to ASIC changing how fees are disclosed, under the RG97 framework.

“This cost disclosure reform has however been in large part discredited in a report subsequently issued by ASIC in July that acknowledged it unfairly penalised not for profit (NFP) funds,” said SelectingSuper, part of Rainmaker. Read more...

Super fund fees ‘jump’ after new rules, but members shouldn’t worry

Average superannuation fund fees have ‘jumped’ following the introduction of new disclosure rules, but this is nothing for fund members to worry about says Chant West.

The average super fund fee increased by 0.19% – from 0.95% to 1.14% – following the introduction of ASIC’s Regulatory Guide 97 (RG97) rules. All this increase came from the ‘investment fee’ component, not the administration fee.

However Chant West, which complied the figures, says super fund members shouldn’t worry about this increase. Read more...

$45.6 billion worth of super trapped in ‘fat cat’ funds

$45.6 billion worth of superannuation is “trapped” in ‘fat cat’ super funds, charging high fees for low performance, according to Stockspot.

The digital investment adviser and fund manager has released its 5th annual Fat Cat Funds Report. In 2017 there were 521 ‘fat cat’ super funds, including 217 fat cat funds that were on the list in 2015.

Stockspot defines ‘fat cat’ super funds as those that have performed worse than the category average over 1, 3 and 5 years and under-performed by more than 10% over that period. Read more...

Consumers rate fees as most important when choosing a super fund

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. Read more...

Impossible to compare super funds under new fee disclosure rules

New superannuation fee disclosure rules will make it impossible for consumers to compare super fund fees and costs, says Industry Super Australia.

Industry Super Australia (ISA) says that ASIC’s new Regulatory Guide 97 (RG97) was designed to inject greater transparency into the, “often murky”, fees and costs that are “unwittingly borne by consumers”. However the industry group says the new rules will make it impossible for consumers to compare funds, and give a “leg up” to ‘bank-owned’ and other retail super funds, by not capturing investment platforms – which contain over half a trillion dollars of superannuation assets. Read more...

‘Significant changes’ to super fund fee disclosure coming, says ASIC

ASIC says there are “significant changes” coming to the way superannuation funds disclose fees and charges, making them more transparent and easier to understand.

New rules for super fund fee and cost disclosure come into effect from 30 September 2017, with the end of a transition period. The changes were originally to apply from 30 January 2017, but ASIC allowed an extension.

The regulator says the changes will help bring consistency across the superannuation industry to what must be included in PDSs (Product Disclosure Statements). Read more...

ASIC allows more time for updated super fund fee and cost disclosure

ASIC has extended the transition period for the trustees of large superannuation funds to comply with updated fee and cost disclosure requirements, a move welcomed by ASFA.

ASIC announced that it has extended the transition period for super fund trustees, among others, to comply with the updated fee and cost disclosure requirements for Product Disclosure Statements (PDSs).

“ASIC has extended the transition period in response to applications from industry associations which had raised concerns that information provided for some products by an earlier date may not be reliable and may not assist consumers in comparing fees and costs,” said ASIC. Read more...

High cost, low balance SMSFs are in ‘transition’ period: report finds

High relative operating costs experienced by SMSFs with small balances is indicative of a transition period, and not an ongoing situation, according to the June 2016 Class SMSF Benchmark Report.

“Recent industry commentary has suggested that self managed super funds with smaller balances are not cost effective, citing that based on ATO data, funds with balances of $50,000 or less have lost 15 per cent over 7 years to June 2014,” said the report.

According to the ATO’s Self-managed superannuation funds: A statistical overview 2013-2014, the most recent report available, the average operating expense ratio in 2013/14 for SMSFs in the $1 – $50,000 range was 12.05%. Read more...