POWERED BY MOMENTUM MEDIA
Low fees no indicator – APRA
Lower superannuation fee structures do not necessarily equate to better outcomes for superannuation fund members, according to the Australian Prudential Regulation Authority (APRA).
The regulator has also suggested that further consolidation within the superannuation sector may succeed in driving efficiencies without undermining competition.
APRA has used its submission to the Productivity Commission inquiry into Superannuation Efficiency and Competitiveness to warn against a simplistic approach based on fees.
"….the lowest fee structure will not necessarily provide better outcomes for members over the long term," the APRA submission said.
"Enhancing overall long-term member outcomes by, for example, improved education and advice to support informed choices by members or more tax-effective investment management, may have a more material impact on long-term net outcomes for members than relatively small reductions in investment or administration fees."
The submission also pointed to other factors, such as "optimising insurance arrangements to appropriately balance the cost of insurance with meeting member needs".
On the question of further consolidation within the industry, the APRA submission said the sector was continuing to consolidate and it was "likely that further consolidation may promote efficiency without unduly impacting competition".
It said this was because the superannuation sector remained far less concentrated than other APRA-regulated industries.
The APRA submission also pointed to the lack of consistency across the superannuation industry, warning that this might prove a challenge to making meaningful comparisons between superannuation funds.
"These include deficiencies in the quality and consistency of available data, as well as the complexity of structures and arrangements within the superannuation system," it said.
"These constraints limit the ability to undertake comparable calculations and provide appropriate levels of transparency, including looking through various related party or other structural arrangements."
Recommended for you
Super funds have built on early financial year momentum, as growth funds deliver strong results driven by equities and resilient bonds.
The super fund has announced that Mark Rider will step down from his position of chief investment officer (CIO) after deciding to “semi-retire” from full-time work.
Rest has joined forces with alternative asset manager Blue Owl Capital, co-investing in a real estate trust, with the aim of capitalising on systemic changes in debt financing.
The Future Fund’s CIO Ben Samild has announced his resignation, with his deputy to assume the role of interim CIO.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
