ISA chief executive David Whiteley said the body has long supported APRA’s role in collecting, publishing and analysing superannuation industry data.
“The superannuation industry holds assets worth more than the nation’s GDP and is of vital importance to Australia’s future retirement income and investment,” said Mr Whiteley.
“The industry benefits from significant mandates and tax concessions and should appropriately be subject to the highest level of transparency and reporting – for consumers and employers, as well as analysts in industry, government and academia.”
According to ISA, the new approach will improve some of the shortcomings asssociated with the previous level of reporting, such as inadequate information on fees and costs charged by funds, and a lack of information about asset allocation.
ISA said it expects some market participants will likely disagree with APRA’s plans to publish most of the data under the new collections as non-confidential.
Mr Whiteley said some funds will argue that this information should be treated as commercial-in-confidence due to its potential to undermine profitability.
“We suggest that if transparency undermines the profitability of certain superannuation products, then that profitability must be at the expense of the consumer, and that any disadvantage to the provider would be entirely offset by a benefit to the consumer.”
Mr Whitely said that obtaining more detailed information on the fees and costs within super funds “can only boost consumer confidence in superannuation and the financial advice industry.”
ISA said APRA also needs to address weaknesses within the existing classification system for superannuation funds.
According to ISA, several funds can be placed in more than one category, and a number of funds have switched categories over time at the trustee’s or regulator’s request.
ISA also said that the classification applied to the data is not always consistent with how funds describe themselves in marketing material.
