RC paper notes ‘unspecified’ industry fund expenses
Industry funds have a relatively high proportion of expenses which cannot be specifically detailed in publicly available data from the Australian Prudential Regulation Authority, according to background information provided to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The background paper, made public on Tuesday, noted the degree to which retail funds spent more on financial advice paid for by members, but then noted the situation with respect to industry funds.
“Retail funds expend relatively more on financial advice paid for by members than other types of superannuation funds,” the background paper said. “While industry funds have a relatively high proportion of other expenses that are not further specified by the publicly available APRA data.”
The background paper also looked at marketing and advertising and noted that superannuation funds, like other financial institutions, might advertise to attract new members.
“Although APRA collects data on overall fund expenses, APRA does not currently publish data on expenses relating specifically to marketing and advertising, nor does it collect data on expenses relating to the management and operation of a fund on a look-through’ basis,” it said.
The background paper then noted that legislation was before the Parliament aimed at enhancing APRA’s ability to collect information from superannuation funds.
Dealing with the provision of financial advice to superannuation fund members, the Royal Commission background paper said the average account balance for those seeking professional advice was $233,000 compared to $109,000 for those who received no advice and $96,000 for those that received advice from their employer.
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