“It is difficult enough for us and we’re analysing funds all the time … We’ve been doing it for 14 years.” Chant says that most of the top-performing funds of the past few years have had above-average funds management fees – but delivered a higher net return for members. “You can’t have 10 or 15 per cent of your portfolio in alpha strategies paying 2 and 20 (2 per cent base fee and 20 per cent performance fee above a hurdle) and expect to get the whole thing for 60bps,” he said. Like most of the industry, Chant is critical of Jeremy Cooper’s MySuper scheme where funds would be forced to set up separate low-cost default options for members who do not elect a super strategy.
The three main industry bodies – AIST, ASFA and IFSA – have all voiced concern over the proposal. Chant says of the current disclosure system that the rules are so loose that they can be interpreted in different ways. “So what we’re saying to Jeremy Cooper and to the Government is: by all means press ahead with reforms that make the whole industry more efficient, but at the same time tighten up the disclosure so that everything’s transparent, there’s no scope for selective interpretation of the rules and everyone’s following the same conventions,” he says. In some instances some costs are not disclosed at all by funds