The Australian Prudential Regulation Authority (APRA) needs to explain why it is collecting, interpreting and then publishing information in the public domain around superannuation heatmaps because it shouldn’t be, according to the founder of SuperRatings, Jeff Bresnahan.
Bresnahan has reacted to the release of the heatmaps by suggesting that instead of regulating, APRA was now “trying to play the shame game”.
“But there is a real risk that some of those shamed will be the wrong funds,” he said. “The problem is that no one in the industry wants to tell the regulator that they have got it wrong.”
Bresnahan claimed that, effectively, APRA was putting into circulation data which analysed just parts of a superannuation but not the whole.
“By ignoring things like governance, advice, insurance and member servicing structures, consumers are not being provided with the whole picture,” he said.
Further he claimed that while conflicts of interest were identified as a major issue in superannuation during the Royal Commission, it seemed ironic that APRA had deliberately avoided reporting any measurement of a fund’s governance structure.
Bresnahan said that in an industry which carries inherently conflicted directors, “it would appear that governance had been ignored in favour of more easily assessable information” and questioned whether such omissions might create legal liabilities for APRA in the future.
The SuperRatings founder said APRA was entering unchartered territory and that it was not the first time the regulator had got it wrong, referencing APRA’s efforts to produce performance tables which were “flawed from a usefulness perspective, in that they don’t reflect the performance of a super fund’s investment options”.
“And so it continues with the heatmaps,” Bresnahan clamed. “Having reviewed the heatmap methodology, SuperRatings is of the opinion that their release into the public domain may create more questions than they answer and that consumers could well be influenced into products that are inappropriate for them.”