Super funds may soon have to display industry average fund performance and fees on their MySuper product dashboards.
Speaking at the AIST ASI conference in Alice Springs, Alex Purvis, senior manager for superannuation at ASIC, revealed consumer testing of the proposal had proved popular and that the Treasury would now decide on whether to require this in future.
The averages would come from information collected by APRA on MySuper funds.
Consumer testing of MySuper product dashboards has also found the public likes to see a 50/50 probability figure of funds estimated return rate over CPI.
This will disappoint many in the industry who felt that mandating a greater certainty of return, such as 70 per cent, would lead to better decision making by members.
“The consumers really liked it, as it showed them nothing is certain,” said Purvis, who reasoned a 50/50 probability was an easier calculation for the public to make.
Purvis also spoke candidly to delegates on the topic of portfolio holdings disclosure. She revealed the regime maybe more pragmatic than the original proposals.
“The fact that there is a materiality threshold discussion by government shows what they are thinking,” said Purvis, who added it was ASIC’s belief that this might prove inconsistent as for some funds revealing the value of large unlisted assets could be the biggest challenge, rather than revealing the smallest, most granular holdings.
In answer to questions from delegates she conceded that fund’s complaint of the cost of the disclosure was a “valid point”.
It is the preference of ASIC, that fund managers of pooled investment schemes should be required to disclose holdings – the so called ‘one level down approach’, so costs could be shared across, schemes, fund managers and custodians.
When questioned about the worth of portfolio holdings disclosure, Purvis admitted there was a leap of faith needed to believe that it would prove worthwhile.
ASIC does not expect portfolio holdings to be primarily used by members, but by the media and ratings agencies, who would then present targeted information to the public.