The Australian Securities and Investments Commission (ASIC) is initiating reforms that are designed to make superannuation fees more transparent and easier to understand.
From 30 September, there will be significant changes to the way superannuation and managed investment funds disclose the fees and charges that impact consumers.
The new requirement comes in the wake of ASIC’s identification of under-reported fees, as well as considerable inconsistency in the way fees and charges are being listed by the funds.
ASIC said these shortcomings have made it very difficult for consumers to understand how much they are paying, what they are paying for and how to compare funds.
The hope is that these changes will bring industry-wide consistency to the disclosures that must be included in the product disclosure statement (PDS), and will help ensure that the information found in the PDS and in periodic statements are more closely aligned.
“As a result, consumers will be better able to understand the fees and costs. The consistency and more accurate disclosure of fees will also help ensure that funds are competing more fairly,” ASIC said.
ASIC also noted that the fees consumers are being charged may reflect the type of investment, with some higher cost investments also bringing higher returns in the long term. This change to reporting will also make it easier for consumers to identify when this is the case.
“ASIC has agreed to extend the deadline for disclosure of property operating costs in the investment fee or indirect costs to 30 September 2018. The extension on this component will help provide additional time for discussions between ASIC and industry about how to calculate these fees,” ASIC said.
ASIC has also extended the deadline for certain disclosures in periodic statements that require modifications to the internal systems of funds.
“This is to ensure the change can be made in a cost effective manner. Those requirements will have effect for annual statements for the year ending 30 June 2018,” ASIC said.
Do you understand the fees and charges on your superannuation account? What could be done to make them easier to understand?