In its submission to the Financial System Inquiry, Mercer argued it is important mandated requirements generate material that can be easily understood and used and excludes any unnecessary information that will “dissuade the readers from reading the material”.
The submission said product dashboards for instance, which were initially intended to provide an easy way for members to compare products, are extremely confusing due to different funds adopting different interpretations.
“Inappropriate requirements and terminology have resulted in dashboards which are more likely to confuse and mislead than assist members,” said Mercer.
The submission also argued the amount of data that must be made accessible is excessive, resulting in higher costs for fund members.
The requirements are particularly burdensome for corporate master funds, the documents said, due to the “multiplicity of arrangements provided by the fund”.
“Much of the material is specific to particular groups of members and it would be preferable if such material could be made available to those particular members using a PIN to access,” said the submission.
“However, it appears this is not possible as the data must be publicly available and members will need to search through huge amounts of material to find the material relevant to them.”
The submission also said while the requirement to reduce the length of PDSs to eight pages has been a step forward, more and more mandated information must be squeezed into these eight pages.
“Some of the mandated wording is repetitive or irrelevant and adds little value, leaving limited room for key information,” said Mercer.
The document also addressed the thousands of pages of legislative requirements.
US based law firm K&L Gates also singled out the “excessively complex” ASIC Class Orders and Regulatory Guides in their submission to the Financial System Inquiry.
The K & L Gates submission said “regulator overlaps, inconsistencies in enforcement and successive regulatory modifications have led to pervasive uncertainty in the financial services industry”.
According to Mercer’s submission, the requirements for superannuation funds are now spread over many acts, regulations, prudential standards and class orders.
“Therefore requirements are often difficult to find, follow and interpret,” said Mercer.
“Many legislative requirements have been included for particular reasons that ignore broader policy issues or create inappropriate reactions and outcomes.”
