The Australian Institute of Superannuation Trustees (AIST) welcomed the Australian Securities and Investment Commission’s (ASIC) move to crack down on misleading fee disclosure practices in the super industry.
AIST policy and research manager David Haynes is pleased ASIC is seeing the need to shield consumers from super funds that under-disclose their fees and costs for financial advantage.
Haynes said AIST was particularly worried about products that were marketed as 'low-fee’ or 'no-fee’, where in fact fees were just hidden.
“Funds not disclosing in the spirit of laws requiring full disclosure can be misleading consumers,” he said.
“In a compulsory super system, consumers must be able to easily compare funds based on meaningful and consistent information about fees and costs.”
In a report released this week, ASIC said many funds ignored costs associated with investing through external investment structures and only looked at the first layer of fees in underlying investment vehicles.
The financial services sector needs to be consistent in its disclosure of fees and costs, ASIC commissioner Greg Tanzer said.
ASIC is especially concerned about the disclosure of management costs.
Amid a challenging market environment, three super fund CIOs have warned against ‘jumping at shadows’.
The professional body is calling for the annual performance test to transition to a two-metric test, so it better aligns with the overarching duty of super fund trustees to act in the best financial interests of their members.
AustralianSuper, Rest, and HESTA agree on the need to retain and enhance the test, yet they differ in their perspectives on the specific areas that warrant further refinement.
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
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