The Industry Funds movement has questioned the criteria underlying the decision by the Australian Securities and Investments Commission (ASIC) to provide comparative data on the performance of superannuation funds.
ASIC moved in late February to release the data in a move aimed at helping members prepare for the new choice of fund regime, using the work of four ratings houses — Assirt, Morningstar, SelectingSuper and SuperRatings.
However, while welcoming the underlying intent of the move, Industry FundServices (IFS) has questioned the criteria underlying the data.
In particular, IFS claims that by only deducting investment management fees, the data ignores the greater impact of other fees covering entry, administration, contributions, exit penalties and sales commissions.
The executive chair of IFS Gary Weaven said that as a result of not taking these other fees into account, ASIC’s comparative data did not give a full picture to 85 per cent of Australian employees who opt for the default or balanced option when choosing a superannuation investment.
“Investment options cannot be looked at in isolation,” he said. “It would be more helpful to working Australians if ASIC offered comparative data based on the true costs of belonging to a superannuation fund.”
ASIC’s director of Consumer Protection, Greg Tanzer said the data comprised a table providing five and 10 year average returns for four basic investment options across Australian superannuation funds, after management costs.
He said that the five and 10 year data had been included because consumers needed to take a sensible long-term approach to superannuation.
“While past performance is no guarantee of future performance, taking a long-term approach gives a better picture,” Tanzer said.
Tanzer emphasised that the data remained the responsibility of the research houses, with ASIC opting not to have it independently verified.
