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(June-2003) User-friendly guide
Choice-of-fund, if it is introduced, would be impossible to contemplate without standardised disclosure of fees and charges, Association of Superannuation Funds of Australia (AFSA) CEO Philippa Smith has warned.
Following a series of tests into consumer understanding of Product Disclosure Statements (PDSs), AFSA has developed a user-friendly super fees and charges document for consumers, which it hopes the Government and the Australian Securities and Investments Commission (ASIC) will implement industry-wide.
The tests, done by Ageing Agendas, were conducted over three years and studied consumers’ ability to compare fees and charges and different investment options. The model PDS was modified by the researchers after each round of testing based on the responses.
Smith says the objective was to test how well consumers understand general information about funds, particularly their ability to compare fees and charges and different investment options.
Based on the findings, ASFA recommends introducing a comparison checklist for consumers and a fees comparison table showing the impact of fees and charges over different periods.
Another recommendation is to give more prominence to warnings that past performance is no indication of future performance.
AUTHOR
Zilla Efrat
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