Consumers still find it difficult to compare superannuation funds because there is no uniform descriptors of what represents defensive and aggressive asset holdings and strategies.
A Super Review roundtable conducted during last week's Association of Superannuation Funds of Australia conference was told that comparability represented a real issue for the industry that needed to be addressed.
LegalSuper chief executive, Andrew Proebstl said that comparability had become an issue, particularly with respect to MySuper funds and he questioned why the regulators were not dealing with the issue.
"….one of the issues that we've been turning our minds to is how funds classify between growth and defensive assets and if you drill into the underlying assets of some funds, particularly in terms of alternatives, they're fairly aggressive with pulling out components of alternatives and categorising them as defensive assets when in reality they're probably more growth assets," he said.
"So there are funds out there that are holding out that they're a certain mix of growth and defensive when really much of the defensive is actually, or could be, characterised as more growth. So there's higher risk in that product but the labelling doesn't disclose that and people are going into those products under, effectively, a misunderstanding, perhaps they're being misled," Proebstl said.
He said any examination of a fund PDS provided a sense of what was going on, and he was surprised that the regulators did not get a similar sense and do something about it.
EISS Super chief executive, Alex Hutchison agreed with Proebstl around appropriately defining defensive and growth assets and the problems it caused.
"Andrew pointed out about investment, about is it really defensive or growth — that can really hit home when people are comparing you because people compare you now online, people may not seek advice directly from you and, you know, that's where you can really lose out," Hutchison said.
In a recent statement, shadow assistant minister for home ownership and Liberal senator for NSW, Andrew Bragg, accused ‘big super’ of fabricating data attributed to the Reserve Bank of Australia to push their agenda.
A “concerning” number of Aussies don’t know what they pay in super fees, a young super fund has said.
The corporate regulator has shared some ‘disappointing’ findings upon reviewing the public communications of more than 20 trustees with regards to death benefits.
According to the industry body, funds should have an obligation to transfer members in failing products to better-performing products in a timely way.
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