Retirement
How to make super comparisons easier
When it comes to disclosing the fees associated with super products and managed investment schemes, the corporate regulator has been told to just keep it simple.
How to make super comparisons easier
When it comes to disclosing the fees associated with super products and managed investment schemes, the corporate regulator has been told to just keep it simple.
It’s not just you; navigating and comparing superannuation and managed investment schemes’ fees, risks and returns can be a head-ache. That’s the finding made today by an external report for the Australian Securities and Investments Commission (ASIC) on fees and costs disclosure.
Based on the findings made in the report, Fees and costs disclosure, ASIC should consider developing a consumer-facing product comparison service under recommendations made by an external report released today.
The report was commissioned in November last year as part of the regulator’s mission to improve transparency for Australian consumers and used information from more than 120 stakeholders.
It suggested ASIC, in addition to the development of a comparison service, work with the superannuation and managed funds industry to “improve consistency” in Fee Templates, and encourage funds to rethink jargon.
For example, where superannuation fee templates use the line “indirect cost ratio”, the term “indirect costs” should be used.
Similarly, the distinction between investment fees and indirect costs should be cut from the fee template and instead merged into a single line; “investment fees and costs”.
Commenting on the report, author and industry expert Darren McShane said it’s currently “difficult to be confident” that the regime is as good as it could be, given the sheer complexities consumers face when comparing and identifying costs.
However, he also acknowledged that the current regime is still world class and that the challenge is improving the system beyond refining default arrangements.
“Fee and cost information and disclosure could, however, be approached in a way that better supports decision-making,” Mr McShane said.
“Some of the challenges that present at the moment are the way that fee and cost information is largely provided in a point-of-sale context, it is generally product or investment option specific, it is largely static, it is separated from other information relevant to decision-making and it tells a very complex story.”
He said ASIC, and by extension the industry, should consider the fact that consumers may need an introduction to some of the terms used in Fee Template, and that the information required to compare investment risks, returns and fees are often buried in a PDS.
“It would be difficult, or at least time consuming, for a consumer to extract these pieces. Technology should be able to support the extraction and presentation of information specific to a decision being considered,” he said, adding that there should be greater emphasis on explaining fees as a “graduated story”.
“Currently fee and cost disclosure is somewhat divorced from information about other decision-making factors: whilst information about returns, for example, is included in PDS and MySuper Product Dashboards, no attempt is made to integrate the related pieces of information.”
ASIC said it welcomes the report and will release a consultation paper in response to Mr McShane's report, outlining ASIC's proposed steps forward.
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more