The Institute of Public Accountants (IPA) has called for more consideration of whether the inefficiencies of the superannuation system are due to a lack of marketplace competition or structural problems in the wake of the Productivity Commission’s report.
While the group supported the Commission’s recommendation for performance benchmarks around returns, fees, level of service and projected retirement income, IPA chief executive, Andrew Conway, noted that greater price transparency had not led to more competition or greatly reduced fees.
“Reforms on the demand side especially around the introduction of standardised products and enhanced transparency of information should result in improved efficiency and innovation in product development,” Conway also said.
“However, competition and efficiency may not always be synonymous as competition which means spending on marketing to gain new members with a focus on profit-making may not improve efficiency.”
The group also argued for attention to be paid to improving financial literacy, as this would improve member engagement which should in turn enhance competition.