For the first time, regulator data reveals that there is widespread failure in choice super funds, meaning people will retire poorer. While MySuper products performed better, a large portion (45%) are still failing members.
“The majority (60%) of choice options covered by the heatmaps delivered poor value over the last seven years. It’s time for urgent action from these super funds, they need to merge, exit the market or dramatically decrease their fees”, says O’Halloran.
Super Consumers Australia welcomes the spotlight APRA is shining on poor performance in the super sector.
“We know that highlighting underperformance drives improvement. Since the first Heatmaps were published in 2019, 22 of the MySuper options that were identified as having poor investment returns and/or high fees have shuttered. We’ve also seen annual fees for members who were in high fee funds in 2019 fall by more than 10%.”
“It is time for the choice sector to face the same scrutiny. We also need to ask how people ended up in such poor performers; we know many people choose based on financial advice. The quality of financial advice review slated for 2022 must investigate how this happened.”
“Blaming consumers for poor choices has become an industry pastime. Given both the super and advice sectors have a duty to act in the best interests of their members and clients, this buck-passing has to stop,” says O’Halloran.
Super Consumers Australia welcomes the extension of the Heatmaps to the choice sector and supports APRA’s work to extend it further.
“Today’s release opened the cupboard on 40% of the choice sector and found it overflowing with skeletons. We still don’t know what is hiding in the rest of the choice sector.”
.jpg){kind=tracking}
