ASIC fee guidance leaves consumers in dark: ISA
The Australian Securities and Investments Commission's (ASIC's) updated guidance for fee and cost disclosure requirements for superannuation and managed investment products does cast light on the underlying costs charged by superannuation investment platforms run by banks and insurers, an industry lobby group said.
Industry Super Australia (ISA) has hit out at ASIC's new disclosure guidance, with chief executive, David Whiteley, saying the carve-out provided to retail choice products was counterproductive.
But Whiteley argued the special carve-out for ‘platform-based choice super products mostly offered by for-profit bank-owned and retail funds will result in inconsistent disclosure between different sectors, which will flow through the Australian Prudential Regulation Authority's data collections, periodic statements and product dashboards.
"This will allow them to continue to avoid disclosing underlying costs on many of their products.
"Industry super funds disclose their underlying fees and costs and are ready, willing and able to comply with the new requirements. In the best interests of consumers, we ask that all bank owned and retail funds be required to do the same."
ASIC provided clarification to the requirements for disclosing fees and costs around disclosure of costs of investing in interposed vehicles, disclosure of indirect costs, removal of doubt that double counting of some costs for superannuation products is not needed, and the appropriate implementation of the consumer advisory warning.
It said that under certain circumstances under the Corporations Act 2001, a body, trust or partnership that is offered an investment option or product through a platform, including directed portfolio services and similar platforms is not an interposed vehicle.
"The public needs more concise and clearly communicated information about these opaque, complex platform-based choice super products, not less disclosure," Whiteley agrued.
"Transparency is especially important in the wake of financial scandals that have dogged the banks' wealth management arms and cost many customers millions in lost savings."
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