Industry Super welcomes complex and detailed expert review of RG97
Darren McShane’s detailed review of fees and costs disclosure, and ASIC’s regulatory guidance, is a thorough and considered study of a complex area, says Industry Super Australia.
His expert report, released today, recommends welcome changes to ASIC’s new Regulatory Guide 97 (RG97) - which sets out how superannuation funds and managed investment schemes must reveal their fees and costs
The report acknowledges how difficult it is for consumers to sensibly compare fees and cost disclosure between superannuation funds.
It shows that the current state of disclosure is poor, and contains welcome recommendations to review the fees and costs framework.
Despite some welcome improvements to disclosure contained in the report, the bank platform exemption from consolidated investment costs disclosure remains an issue.
Over $500 billion is invested through platforms typically owned by banks and wealth management groups, and used by financial planners.
Industry Super public affairs director, Matt Linden, said: “A significant amount of good work has been undertaken but this report shows fee disclosure is far too complicated for experts let alone consumers”.
“Much of the complexity is driven by the structure of platforms which straddle both superannuation and non-super investments”.
“We remain concerned that the business practices of platforms are being accommodated over comparable and understandable disclosure for consumers - but we will continue to work with ASIC as it responds to the report”.
“The failure to find a solution for the opaque fee structures of super funds that utilise platforms serves to highlight the importance of net returns to assess the relative merits of superannuation options”.
“It is likely legislative reform will be necessary to ensure consumer interests are put first,” said Linden.
Industry Super is calling on ASIC to adopt the recommendation to review the regulation and disclosure of bank platform operators.
In 2017, independent agency SuperRatings said RG97’s lack of simple comparability was a big concern, and that it was imperative that consumers could make fair and reasonable comparisons.
The external expert report follows extensive industry consultation. ASIC will consider its findings before conducting its own consultations.
Matthew Linden is available for interview. Media contact: Phil Davey 0414 867 188
Industry Super Australia provides policy, research and advocacy on behalf of 16 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of six million Australians