In a statement released on Tuesday, APRA said since the introduction of the heatmap in December – which aimed to benchmark fund performance and fees – super fund administration fees had “largely remained static or risen slightly, while the majority of funds that underperformed on fees and costs in the December 2019 heatmap continue to have relatively high fees”.
An insights paper released alongside the updated heatmap data showed that 76 out of 90 MySuper funds had kept their administration fees the same since December 2019. Out of the 14 MySuper products that had altered their fee structure, 10 of these had increased fees.
APRA deputy chair Helen Rowell said the regulator was intensifying its supervision of underperforming funds.
“APRA is writing to the trustees of more than a dozen MySuper products that continue to seriously underperform on fees,” Ms Rowell said.
“The letter will put these trustees squarely on notice that APRA is seriously considering its response to their failure to swiftly address these issues. Any response may include formal enforcement action.
“Superannuation trustees have a legal duty to promote the financial interests of their members. With access to APRA’s updated heatmap, as well as their member outcomes assessments and business performance reviews, trustees have no excuse for not understanding how well they are achieving this in comparison to their peers.”
If running cost or fees are the most important thing then why is it that there are large amount of people who buy expensive cars that cost more to maintain with their running costs? Because they want performance and that cant be always guaranteed but generally preforms better than the low cost car.
Risk adjusted net returns solves the problem.
don’t be ridiculous, that is far too complicated for a regulator to understand…
Disturbing that APRA use fees as the benchmark for underperformance. Maybe going out on a limb here, but wouldn’t it be better if they used net returns compared with risks taken as a slightly better alternative.
If this report is correct, APRA are seriously off the mark and show very poor understanding of business. You don’t reduce your fees just because a regulator or a newspaper or anyone else, highlights that your product has higher fees. At most you simply explain to members why this is the case.
hilarious, great to see effective policy in action. 10 increases!! I guess the bench marking was helpful for some who didn’t realise their competitors were cheaper!! Just goes to show how disinterested Australians are generally when it comes to super, UNLESS they have an adviser, then they are mildly interested.
yes and this is where the Industry Funds cash in!!
the system is flawed, Time for 100% Sovereign Funds.
Ban AFSL’s, Ban Advisers. it’s all over.