Too many super funds are serving up poor performance and high fees
In data released today, the superannuation regulator finds 45% of the ‘choice’ market is underperforming. Super Consumers Australia is calling for super funds to act in the best interests of their members and either lower fees or exit the market.
“It is appalling that after several years of transparency, almost half the funds in this major segment of the market are still delivering high fees and poor investment performance. We welcome greater scrutiny promised by the regulator, but these funds also have to take responsibility given they have a legal duty to act in the best financial interests of their members,” says Super Consumers Australia Director, Xavier O’Halloran.
“Some of these funds clearly shouldn’t be in the market, so we are calling on them to stop inflicting harm on the retirement savings of hundreds of thousands of Australians. Either slash your fees or exit the market altogether,” says O’Halloran.
The performance ‘heatmaps’ released by the regulator today cover less than half of the money in ‘choice’ investment options. Major parts of the market, including options sold through platforms and to people in retirement are not disclosed. Many of these products are also not subject to performance testing.
“It is highly concerning that so many products in the superannuation market face no public scrutiny or repercussions when they fail to act in the best interests of their members. Sunlight is the best disinfectant and needs to be backed by strong repercussions.”
“We want to see greater transparency and an expansion of performance testing, particularly for products currently being sold to older Australians. Australian retirees have the most to lose and the least capacity to recover from being sold a poor product. In particular, we want to see APRA release heatmap data on retirement products and the Government extend performance testing to these retirement products,” says O’Halloran.