The industry funds movement has claimed that too many eligible rollover funds (ERFs) are failing to provide appropriate investment returns.
Following on from the recent choice of superannuation fund advertising campaign mounted by industry funds last year, Industry Fund Services (IFS) this week claimed that research conducted by consultancies The Heron Partnership and SuperRatings had shown that most ERFs were not effectively serving the interests of their members.
The findings have prompted the chief executive of SuperRatings, Jeff Bresnahan to suggest that ERFs be immediately reviewed by the Australian Prudential Regulation Authority.
According to the research, only one of the 14 registered ERFs surveyed provided strong investment returns combined with low fees and a genuine service aimed at reuniting people with their unclaimed superannuation money.
IFS quoted The Heron Partnership executive director, Wendy Barton as saying that never before had a product assessment revealed such a wide variance between the highest rated product and the rest of the market.
IFS claimed that in many cases, the superannuation funds which were transferring unclaimed accounts to poorly performing, high fee ERFs were related parties.
