Changes to superannuation fee disclosure proposed by the Australian Securities and Investments Commission (ASIC) to improve transparency won’t solve the problem, Industry Super Australia (ISA) has warned.
In a submission on the regulator’s Regulatory Guide 97, which aimed to make how both super funds and managed investment schemes reveal their fees and costs clearer to consumers, ISA said that the proposed reforms didn’t go far enough.
RG97 planned to do this was based on introducing a ‘net returns’ measure that would incorporate the effect of both fees and costs.
ISA chief executive, Bernie Dean, warned however, that this would not only fail to solve the problem of fee transparency but also could cause more confusion for consumers.
“The current proposal by ASIC only serves to reinforce the inconsistent and confusing fee disclosure structure – whereby platforms owned by banks and investment managers would only be required to disclose the cost of gaining access to a product, not the cost charged by those issuing the product,” Dean said.
“This means consumers may believe these products are less expensive, while unaware they will then have to pay additional fees and charges on top of what has already been disclosed.
“Consumers should be able to make fair and reasonable comparisons and have confidence that they are comparing apples with apples.”
Dean slammed the proposal as only giving consumers “empty rhetoric and more confusion”.