The Australian Securities & Investments Commission asked the country’s pension funds Friday to improve disclosure of fees and other costs associated with their investments.
Reported by Reuters:
The move is aimed to improve the quality of disclosure by funds and allow consumers to make informed decisions, the Australian Securities & Investments Commission (ASIC) said in a statement.
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The industry is plagued by high fees and a narrow range of products for retirees to invest their savings in. Coupled with poor spending decisions by retirees – who often cash in their ‘super’ and splash out on holidays and cars – it has meant more Australians are outliving their investments.
“Substantially higher superannuation balances and fund consolidation over the past decade have not delivered the benefits that would have been expected,” a major review of Australia’s financial system said over the weekend.
“These benefits have been offset by higher costs elsewhere in the system rather than being reflected in lower fees.”
ASIC’s order will apply to all product disclosure statements for superannuation and investment products from Jan. 1, it said in a statement.
“Consumers can have more confidence that industry is disclosing fees and costs more accurately and in the same manner, ensuring comparisons between products are made on the same basis,” ASIC commissioner Greg Tanzer said.
Australia’s pension system as a whole manages $1.6 trillion in assets.