Upcoming regulatory changes could make comparing the fees and charges of different superannuation funds much more difficult in the future, giving some funds a substantial advantage over others, and potentially misleading Australians.
According to a new report from SuperRatings and Industry Super Australia (ISA), inconsistencies in the latest fee and cost regulations from the Australian Securities and Investments Commission (ASIC) could see Australians mislead into believing a platform investment is cheaper when, in fact, it may be more expensive.
According ISA, under the new disclosure rules, all of a super fund’s fees and costs are disclosed in one place, including indirect costs, but if a consumer invests through a super fund that uses a ‘platform’, they’ll need to scrutinise multiple Product Disclosure Statements (PDS) to calculate fees and costs.
In some cases, this could make some conventional super funds appear at first glance to be four times as expensive as investing in the same product via a platform, even when the total costs might actually be more expensive.
SuperRatings described this “lack of simple comparability” as one of its biggest concerns around the new regulations, emphasising the importance of Australians being able to make fair and reasonable comparisons between the available options that aren’t unduly complicated.
According to ISA public affairs director, Matthew Linden, over $500 billion is invested through platforms, which are typically owned by banks and wealth management groups and used by financial planners.
“The new super rules are more likely to mislead consumers than help them.”
“It is time for the Government to step in, otherwise super fund members across the country could be misled.”