The Australian Government’s Productivity Commission has sparked debate recently with its release of a long-awaited review into the efficiency and competitiveness of Australia’s $2.7 trillion superannuation industry.
While the report is essentially government commissioned research, and not legislation or policy, the way in which it’s publicly received will be of much interest to Australian political leaders as we draw closer to the upcoming federal election.
The nature of the Productivity Commission’s recommendations, and the impact they would have on the superannuation industry which has remained relatively unchanged for the past 27 years, is what is dividing opinions.
One of the core proposals, an introduction of a list of the 10 best performing funds, selected by an expert panel, has led recent debate. Various media outlets have responded by compiling their own lists and industry commentators have questioned how the list would be curated and whether it would be truly independent.
Regardless of whether this or any other recommendations are adopted by government, now is the time that superannuation funds need to remain vigilant when communicating with members and investors.
The Productivity Commission’s review, coupled with the banking royal commission, is another reminder that superannuation funds need to engage with their members and explain their investment approach, key structures, and fees.
Transparent, accurate, and consistent communication remains key when it comes to superannuation funds engaging with their members and investors.