Research firm Chant West has proposed a set of minimum disclosure standards for superannuation funds in the key areas of fees, investment performance and insurance in order to combat a lack of transparency.
"We've seen the Cooper review come out with a series of proposals, most of them aimed at reducing costs. That's a laudable intention but, as well as being lower, costs also need to be more transparent," Chant West principal Warren Chant said.
Among some of its 18 recommendations, the research firm said funds should show all fees gross of tax and separate product fees from advice fees. For investment performance, funds should show all returns net of investment fees and tax and adopt standard definitions of growth and defensive assets.
The burgeoning area of group insurance did not escape attention, with Chant West saying insurance was the "worst disclosed area in superannuation".
Chant said the research firm discovered some funds were not disclosing costs or presenting them in a way that makes them look good against competing funds.
"What funds are doing is perfectly legal, because the disclosure rules are so loose that they can be interpreted in different ways," Chant said.
"You would think the funds' documents, what is called their product disclosure statements, would set out all the important information in the same way, but sadly that is far from true. If you relied on the information in those documents, there is a strong likelihood that you would be comparing apples with oranges."
