Speaking at the launch of the annual FSC/DST CEO Survey in Sydney yesterday, FSC chief executive John Brogden said APRA is set to begin publishing data on superannuation fees and performance in August this year.
"What that’s going to do is bring the reporting of superannuation fees and performance to the front page of the newspaper," said Mr Brogden.
This means that the chief executives who were surveyed in the FSC/DST report will have to improve their fund's member services in preparation for "greater competition", he said.
"This will awaken a lot of people who have been uninterested in superannuation because it will be flashing in front of their face on a regular basis," said Mr Brogden.
When it comes to fees being published, the concern of superannuation fund chief executives – both in the industry and retail sectors – is that the focus will be on fees over performance, he said.
Mr Brogden added that the Financial System Inquiry interim report observation that Australian superannuation fees are high internationally was a 'flawed' comparison.
Firstly, Australia runs a defined contribution scheme rather than a defined contribution scheme, he said.
"The second thing is its full service ... it’s not just a pension product. It’s a pension product with advice imbedded, with life insurance imbedded so that’s part of why it is more expensive," said Mr Brogden.
"So it is hard to compare the Australian superannuation scheme on a flat line comparison with other parts of the world," he said.
"Nobody is going to thank you when they retire for having the cheaper superannuation fund with the worst returns," said Mr Brogden.
There will be behavioural changes when consumers begin to find out more about their superannuation, he added – not all of them positive.
"One problem we have on monthly reporting on superannuation returns is you risk people making monthly decisions about a four-year investment," he said.
"I don’t want to sound too paternalistic, I don’t want to sound not willing to be open to transparency and to reporting all those sorts of things, but there are consequences to the uninformed of all that date being thrown at them," said Mr Brogden.
"There are going to be behavioural changes, and super fees will be the discussion to replace bank fees," he said.
