Financial services firm Colonial First State (CFS) has tackled claims that industry funds are better performers and cheaper than retail funds.

"The current comparisons made between industry and retail funds have been misleading," CFS general manager of strategy Nicolette Rubinsztein said, at an Institute of Actuaries of Australia seminar yesterday.

Current data used for such comparisons does not include the asset allocation of respective funds, the dollar fee cost of advice, or the value of advice, Rubinsztein said.

"Industry funds have a greater allocation to growth assets compared with retail funds, and more exposure to the unlisted markets. The recent research... showed the differences in the performance returns between the sectors were attributed to fees and not the manager skill," she said.

She said fee comparisons must be on a like-by-like basis.

"There is still a lot of work to be done by the rating agencies on the true comparison of fees. We are moving to a greater convergence between the sectors, with retail funds reducing their fees by 5 per cent and industry funds increasing fees by 5 per cent."

Also, advisers do not recommend industry funds because they did not have access to a range of reports that retail funds offer. Industry funds do not use daily unit pricing, or work with research houses to provide data, according to Rubinsztein.

"Over 100 per cent of CSF's retail net inflows are into products that do not have in-built commissions. We must look beyond the commission argument to understand why advisers do not recommend industry funds.

"In the end, the really good funds in each sector will do well, not one particular sector," she said.