At a time when Australians are reportedly paying more than $20 billion annually in fees and expenses on their superannuation, financial comparison site RateCity.com.au has launched a tool that increases transparency around the fees charged, to help simplify the process of finding a suitable fund.
RateCity’s super tool is the most comprehensive of its kind in the Australian market, allowing consumers to analyse fees, performance, investment allocation, insurance cover, and other features from over 600 funds, based on underlying data supplied by SuperRatings.
Jeremy Willink, financial commentator for RateCity.com.au, said there is a lack of fee-based competitive tension in the Australian superannuation sector, and that the RateCity tool aims to unsettle the status quo.
“Australians spend around $1300 on super fees and expenses each year on average – that’s three times the median rate of fees charged in developed countries, which is far too high,” he said.
“Competition requires transparency, meaning that it must be easy for consumers to compare the performance of their fund, net of fees, against the market.
“We believe that Australians either aren’t aware of the fees being charged or they don’t know how easy it can be to seek out a better option for their retirement savings and we want to change that up,” he said.
The high cost of superannuation was a key focus of David Murray’s Financial System Inquiry report. The report argued that super fees have not fallen as low as they could have done due largely to an “absence of strong consumer-driven competition”, reinforcing the need for an online super comparison tool.
RateCity chief executive, Paul Marshall, added that Australians have really embraced online comparison tools as a way to save money in all areas of life – from finding a cheap flight, the cheapest petrol to their home and car loans. Yet, until now superannuation has not been one of those.
“Ultimately, we want to think of super as being as easy to compare as other consumer products,” he said.
Commenting on the launch SuperRatings chief executive, Adam Gee, said: “SuperRatings is pleased to be able to provide the superannuation industry’s most comprehensive data to RateCity to assist consumers compare superannuation funds.”
“In what has traditionally been a difficult sector to evaluate, we believe the comparisons provided by RateCity will assist all consumers to better understand their superannuation benefits and the funds that provide them,” he said.
The new category adds to RateCity's already strong market share in financial product comparison including the home loan and credit card markets.