POWERED BY MOMENTUM MEDIA
Cheap commoditised products won’t help members: CIFR
The Financial System Inquiry's (FSI) push for low cost commodity products under the MySuper regime is at odds with the superannuation industry's intention to tailor products for members.
That is the view of Centre for International Finance and Regulation research director Dr Geoff Warren, who said the FSI's push for lower fees and cheap products, fails to take into account the issue of whether members receive value for the fees.
"The fees are partly high because of the structure of the system we've got in Australia, which is almost a Rolls Royce one where we've got lots of things in there like insurance and choice, lots of product offerings, lots of regulation and so on, and all these things are costly and that pushes up the cost structure," Warren said.
"The problem with the FSI is just focusing on fees per se isn't the right thing. You need to focus on whether when you spend money, if you're getting something worthwhile for it."
The comments come after the CIFR released a report last month analysing the progress of MySuper, and discussed the FSI's call for a formal competitive process through tenders and auctions if a 2017 review of the system fails to find big improvements in efficiency and competition.
Warren is not convinced the FSI's call for a cheap commoditised product with four or five products delivered to everybody at a cheap rate, will deliver the best results for members.
He favours the idea of having slightly more expensive products that are more tailored to the individuals' circumstances.
"Certainly what I'm saying is that's the way the industry was moving. They each tailored to their own specific member base," Warren said.
"Remember these vary quite a lot across funds. So you end up with lots of different MySuper products in part because the member bases of all funds are all different."
Recommended for you
The lower outlook for inflation has set the stage for another two rate cuts over the first half of 2026, according to Westpac.
With private asset valuations emerging as a key concern for both regulators and the broader market, Apollo Global Management has called on the corporate regulator to issue clear principles on valuation practices, including guidance on the disclosures it expects from market participants.
Institutional asset owners are largely rethinking their exposure to the US, with private markets increasingly being viewed as a strategic investment allocation, new research has shown.
Australia’s corporate regulator has been told it must quickly modernise its oversight of private markets, after being caught off guard by the complexity, size, and opacity of the asset class now dominating institutional portfolios.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
