The Association of Superannuation Funds of Australia (ASFA) has thrown its weight behind the concept of third-party administrators being brought under the regulatory umbrella of the Australian Prudential Regulation Authority (APRA) and the sanctioned use of tax file numbers in super account administration.
In its submission to the second phase of the Cooper Review into superannuation, ASFA also called for all superannuation ratings agencies to be compelled to hold an Australian Financial Services Licence and for financial advice to be separated out and paid for on a fee-for-service basis.
The ASFA submission, which substantially backed calls by the Institute of Actuaries for the separation of fees into four different categories, said there was a need to separate out advice fees because different superannuation funds offered markedly different service levels for advice.
“It is important for members to be able to understand what they are paying for and utilise the services accordingly,” it said.
“For example, if they do not want advice they may prefer to choose a fund that does not offer the service,” the submission said.
ASFA said it believed the level of advice fee should always be shown, including whether it could be turned on or off.
The submission also called for a consistent industry approach with respect to fees, with standard definitions and standard disclosure arrangements.
“There needs to be a consistent and enforced methodology for calculating superannuation fund investment performance, both in terms of the fees and costs deducted,” the submission said.
