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ASIC’s critical analysis of super
The Australian superannuation industry lacks strong-price-based competition and this is leading to higher costs and sub-optimal outcomes for members, according to the Australian Securities and Investments Commission (ASIC).
While ASIC may not be the primary regulator for the superannuation industry, it has used its latest Corporate Plan to make clear its view of the industry and its perception that the sector could do much better.
It has pointed to the fact the Australian funds management industry reached has $2.6 trillion in total assets in June 2015 and this has been driven in large measure by superannuation, including self managed superannuation funds (SMSFs).
"Super remains a major source of capital — now $1.93 trillion, with around 30 per cent of this held in self-managed super funds — boosting national savings, increasing the depth and liquidity of financial markets, and compelling the participation of nearly all Australians in financial markets," the ASIC Corporate Plan said.
It said the movement of savings from the banking sector to the super sector was continuing to propel growth in capital markets, including increased market-based financing.
"However, a lack of strong price-based competition in the super system is leading to higher costs and sub-optimal outcomes for members," the Plan said.
It said this, along with other factors, such as low member engagement, might lead to Australians being financially under-prepared for retirement due to the inadequacy of their retirement income.
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