ASIC has chosen a former director to lead an external review of the regulator’s guidance on superannuation fees and costs disclosure.
Darren McShane has been appointed to lead the external review on Regulatory Guide 97 Fees and costs disclosure, which was announced by the corporate regulator on 2 November in response to "feedback from across the industry around challenges with the practical implementation of RG 97".
Mr McShane has three decades’ experience in the superannuation and managed investments industry, and from 1990 to 2002 was a director of ASIC.
From there, he headed to Hong Kong’s Securities and Futures Commission to advise on policy issues regarding investment products and funds management as a member of the product advisory committee.
He held the role of chief regulation and policy officer and executive director at Hong Kong’s Mandatory Provident Fund Schemes Authority from 2002 to 2017, and in the last three years also chaired the International Organisation of Pensions Supervisors Technical Committee.
Mr McShane will lead the review that will examine whether ASIC’s regulatory guidance “will best meet in practice the objective of improving fees and costs transparency for consumers”, according to a statement.
Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck welcomed the appointment and re-emphasised the AIST's support for the review.
"Other jurisdictions have been grappling with the challenges of tackling fee and cost disclosure in financial products, so an international perspective from Mr McShane on what works and what doesn't will be very useful to the review," she said.
The current disclosure requirements made it difficult for consumers to compare "apples with apples", she said.
"There are significant unresolved issues with the current fee and cost disclosure requirements that would benefit from a holistic review, which includes an examination of other policy and legislative settings affecting super funds, ASIC instruments and guidance, and consideration of international best practice," Ms Scheerlinck added.
To be completed by mid-2018, the review will look at “the value of fee and cost information for consumer decision-making” and how much it helps consumers in product comparisons, as well as the “practicalities and costs of producing fee and cost information”, according to the statement by ASIC.
In the interim, funds are expected to comply with current legal requirements “in good faith and not mislead consumers about fees and costs”, the statement said.
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