Choice superannuation funds and Managed Investment Schemes (MIS's) should be subject to the same level of fee scrutiny as MySuper products, according to Australia's largest superannuation fund, AustralianSuper.
The fund has used a submission to the Financial System Inquiry to argue that legislative reform is needed to place higher responsibilities on trustees to inquire, understand and then disclose all fees and costs applying to investment management, investment in collective investment schemes and costs applying to underlying investment of those schemes.
The submission argues that the most needed change to affect fees and efficiency in superannuation "is a real consideration of the fees charged in investment management".
"Investors in superannuation need a more robust and transparent system of fee and cost disclosure that applies to all relevant participants in the market, not just superannuation trustees," it said. "Investors in superannuation suffer information asymmetry — they do not know, nor do they have access to information about the real fees and costs of the investments they make, because this information is not always available to the market."
Discussing the need for legislation, the submission said that, to be effective, the reform should also look at the cost of active and passive management and that if concern existed about active management being too expensive, fund managers should be required to report and provide information on investment performance on a net return basis.
