ASIC publishes independent report on super fund fee disclosures

The fees and costs imposed by Australia's mandatory pension plan are so complex that the regulator has been asked to create a database so that the public can compare the funds.

Darren McShane, the Independent Expert He spent nine months reviewing the rules – themselves four years later – in response to an industry reaction against their complexity.

Mr. McShane's 300-page report recommends to the Australian Commission securities and investments to investigate the creation of a searchable database [Traduction] "I consider it to be It is necessary and appropriate to suggest various enhancements to the disclosure tools so that they can better serve the primary purpose of the policy of providing consumers with information that they can use. can use to make better and more informed resource optimization decisions, "he said

.Many commercial information providers have developed super comparison databases, according to Mr. McShane, many are not publicly available, or may not be ideal for average Australians to compare between products.

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"A centralized database provided by an agency as a public body or an agent of a public body would be better, "he said.

According to the report," many issues should be worked with "the industry, on topics such as categorization of products covered and the elements of fees and costs that should be at the center of attention. " 19659002 "Broad stakeholder engagement would be needed and consumer testing may be deemed necessary.] Eva Scheerlinck, Executive Director of the Australian Institute of Superannuation Trustees, welcomed this recommendation of an" online public system " for the comparison of fees and costs ", but warned that" it should also allow members of the super fund to compare net returns in the long run. "It's the missing piece in our super system: the Net returns are what matters most for retirement outcomes, yet it's still extremely difficult for average members of the super fund to compare them, "she said, although robo-advice has become an expression in the financial services sector, the same types of technologies could be used for "robo-info", such as that contained in the database recommended by Mr. McShane [1965]. 9008] He acknowledged that the current regime was "technically complex and difficult to understand," but he urged ASIC to prevent the industry from choosing its 34 recommendations

"I would be willing to accept ASIC is particularly uncomfortable "

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Rather, the recommendations should rather be considered" together rather than unrelated "[19659008] ". Hopefully, considered collectively and objectively, the proposed directions will be seen as an opportunity for different parts of the industry to work collaboratively with each other and with the ASIC, to advance an issue that has co. ASIC welcomed McShane's report as "a comprehensive badysis of the cost and cost issues arising from the Australian regulatory framework".

He will now go to a consultation. "In preparing the report, Mr. McShane has spoken with over 120 different stakeholders and has reviewed the approaches to disclosure of fees and costs in other jurisdictions," said the regulator

. "robust use" of its discretionary powers "in a way that could, in some respects, depart from the more established use of these powers".

The report, released Tuesday, is a response to industry criticism of the complexity of the fee disclosure regime known as RG97, which began last September.

The rules were developed over the last four years and designed to allow fund members to more easily compare costs between different products and services. But two months after the implementation of RG97, the ASIC was forced to appoint a pension and regulatory expert to review the plan after allegations of negligence, lack of accountability and lack of flexibility

. ] In the report, Dr. McShane made 34 recommendations, one of the key elements of which was to improve consistency in how expense information is incorporated into product declarations and how they are communicated. to customers.
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