POWERED BY MOMENTUM MEDIA
APRA funds need to be more transparent
Superannuation funds regulated by the Australian Prudential Regulation Authority (APRA) must focus on regulatory compliance to avoid misleading new and existing members, according to SMSF (self-managed superannuation fund) Association chief executive, Andrea Slattery.
Slattery's comments come in response to the recent warning to APRA superannuation trustees by the Australian Securities and Invesments Commission (ASIC) deputy chairman, Peter Kell, that they should be mindful of the financial services laws and ensure that any of their communications to new or existing members were transparent and not "misleading or deceptive".
"This is a timely warning from the regulator. New members of some funds are being given the impression that they need to roll over existing superannuation to become members," Slattery said.
"These institutions need to stay between the regulatory goalposts. It is not only misleading but also deceptive as members may have insured benefits or investment options in other funds that might not be available if they roll over to an APRA fund."
In light of ASIC's review of compliance issues involving APRA funds, Slattery questioned the lack of diversification of members' investment portfolios particularly as more and more APRA funds provide direct investment options with high concentrations in particular investment classes.
"This is something SMSFs are continually criticised for failing to have and is a fallacy with the vast majority of SMSFs," Slattery said.
"What's interesting is that these direct investment options are being likened to an SMSF - an erroneous and misleading comparison. The fact is these direct investment options in the APRA funds typically don't have the range of investment choice or the flexibility of an SMSF."
AUTHOR
Daniel Paperny
Daniel Paperny is a technology journalist for Cirrus Media, writing for financial services mastheads FST Media, Money Management and Super Review. Previously, Daniel was the editor of the Bondi View newspaper, focusing on investigative news reporting in current affairs, finance, sports and politics.
Recommended for you
The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
37.15 3 y p.a(%)
3
GAM LSA Private Shares AU I
33.96 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
Plato Global Alpha A
28.73 3 y p.a(%)
