MySuper is not the best way of reducing fund management fees and could even increase fee levels, according to Schroder Investment Management Australia chief executive Greg Cooper.
"Are fees too high? Well, at one level you could argue they are, but the solution to that isn't necessarily indexing, or implementing a whole new structure for funds," Cooper said.
"The big arbitrages in funds management, if you like, are scale, complexity and time horizon."
Although the advantages of scale are widely understood, Cooper said Australian fund managers have not been making the best use of them.
"The more assets you've got the cheaper it is to manage, but a lot of funds don't play to that benefit," he said.
"A lot of funds over the past decade have taken their increasing size and used that to appoint more and more managers."
Super funds should also reduce complexity in their portfolios and not allocate money to alternatives or structured products, he said.
"The less transparent you can make something and the more structure you can put around it, the greater the opportunity is to generate fees out of it," Cooper said. "We would put alternatives in that bucket."
Finally, super funds would be more efficient if they managed their portfolios against their long-term objective, which is to outperform the consumer price index, instead of trying to outperform their competitors.
Cooper welcomed the appointment of the new Superannuation Minister Bill Shorten, and said he hoped he would review the MySuper proposal.
"Having a fresh set of eyes and somebody with an industry background can't be a bad thing," he said.
Cooper argued that Shorten should also focus on accelerating the increase of the superannuation guarantee to 12 per cent, and preferably higher.
He also emphasised the need to implement SuperStream quickly in order to increase the efficiency of the industry.
