The Australian Securities and Investments Commission (ASIC) has responded to feedback from the superannuation industry and will appoint an external expert to review fee transparency for super and managed investment schemes.
The announcement comes after months of grumblings from industry super and other independent experts that the watchdog’s plan to police how super funds were investing money would unfairly favour retail and for-profit funds.
ASIC stated that the implementation of the industry regulator’s new fee reporting system, known as RG 97, would treat all funds the same way, but this announcement may signal that there was evidence to suggest otherwise.
The watchdog is hoping that improving the transparency of super fund fees and costs and encouraging further disclosure of investments will benefit consumers.
According to ASIC, funds have already been investing in improving fee disclosure to ensure that they are meeting best practice procedures.
The confusion around how super funds work has been baffling consumers for years. ASIC hopes to shed some light on how super money is invested as well as on funds’ fees and costs.
ASIC reported: “fees and costs are not the only significant consideration for consumers, as some higher cost investments may produce higher net returns in the long term.
“ASIC will appoint an external expert to consider the RG 97 reforms and their impact, liaise with industry and produce any necessary recommendations about how better transparency and comparability of fees and costs may be achieved.
“ASIC's oversight of PDS and periodic disclosure will maintain its current facilitative compliance approach, focusing on the key aim of ensuring that consumers are not misled.”
The expert review is currently underway and the recommendation process should be concluded early next year.
Read more at www.asic.gov.au
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