The gloves came off yesterday in the fees-disclosure stoush as the Industry Super Network accused retail funds of seeking to “rewrite their underperformance” to the detriment of members.

ISN chief executive, David Whiteley, said retail super funds are “seeking to rewrite the underperformance of the retail sector by retrospectively removing administration and advice fees from past returns, while leaving investment management fees at their historic (and presumably lower) levels”.

Whiteley said the proposed IFSA Standard No. 6B required retail super funds (who are IFSA – now FSC – members) to report returns net of tax and investment costs, but gross of administration and adviser fees paid by members.

The Industry Super Network estimated that IFSA Standard No. 6B would, on average, add around 80 basis points to the reported investment returns of retail super fund products, Whiteley said, but subtract 6 basis points from the reported performance of industry super fund products.

In response to criticism of this proposed standard, the Financial Services Council (formerly IFSA), yesterday put it on hold while waiting for the Gillard Government’s response to the Cooper review.

This on-hold approach was also prompted by criticism from ratings agency SuperRatings that the FSC’s proposed Standard No. 6B was misleading to the public.

SuperRatings’ managing director, Jeff Bresnahan, said the standard was “creating false reporting. The numbers they (the retail funds) wish to put out in the public domain bear no resemblance to what a member has actually earned, and for that reason they should not be allowed to be put in the public domain.“