The super fund industry debate has been sidetracked, in the opinion of Stronger Super consultative group chairman Paul Costello, who attempted to redirect the debate back towards quality of products rather than on lowering costs.
Speaking at a Financial Services Council/Deloitte lunch in Melbourne, Costello told the audience that the industry was too focused on lowering costs in the belief that that would solve all their problems.
“That is too premature; I don’t for a moment think that there was anything from Treasury or government to indicate that lowering costs was the final outcome,” Costello said.
MySuper is fundamentally about improving the quality of what super funds did, and cost was just a part of that, he said.
The structure of super fund products should be made simpler for investors, and that alone would reduce costs, he said.
Active management or high costs market assets should not be binned in favour of lowering costs, he added.
Costello also warned the industry not to “publicly voice their differences” over aspects of the MySuper legislation.
The government wanted to implement their agenda without industry criticism of what they are trying to do, he said.
“There is little value in your time and my time, spending three or four months simply reiterating differences and presenting [them] to the government,” Costello said.
The government would listen to the industry’s concerns if there was an industry consensus around MySuper, he added.
