Su­per fees set to be­come more trans­par­ent and eas­ier to un­der­stand

Alpine Observer - - Regional Extra -

FROM Septem­ber 30, there will be sig­nif­i­cant changes to the way su­per­an­nu­a­tion and man­aged in­vest­ment funds dis­close the fees and charges that af­fect con­sumers.

The new re­quire­ment fol­lows the Aus­tralian Se­cu­ri­ties and In­vest­ments Com­mis­sion (ASIC) iden­ti­fy­ing a sig­nif­i­cant amount of un­der­re­port­ing of fees, as well as con­sid­er­able in­con­sis­tency in the way fees and charges are listed by funds.

ASIC found this made it very dif­fi­cult for con­sumers to un­der­stand how much they were pay­ing, what they were pay­ing for, and to com­pare funds.

The changes will help bring in­dus­try-wide con­sis­tency to ex­actly what must be in­cluded in the prod­uct dis­clo­sure state­ment (PDS).

From later in 2018, the changes will also en­sure that the in­for­ma­tion in PDS and in pe­ri­odic state­ments will match more clearly.

ASIC stated that as a re­sult, con­sumers will be bet­ter able to un­der­stand the fees and costs.

Con­sis­tency and more ac­cu­rate dis­clo­sure of fees will also help en­sure that funds are com­pet­ing more fairly.

ASIC also noted that the fees con­sumers are be­ing charged may re­flect the type of in­vest­ment, with some higher cost in­vest­ments also bring­ing higher re­turns in the long term.

This change to re­port­ing will also make it eas­ier for con­sumers to iden­tify when this may be the case.

ASIC will make amend­ments to pro­vide more cer­tainty around the rel­e­vant re­quire­ments and un­der­take com­pli­ance checks through­out the in­dus­try, to en­sure funds are meet­ing their obli­ga­tions.

Fol­low­ing ex­ten­sive con­sul­ta­tion with in­dus­try on the in­tro­duc­tion of these changes, ASIC has agreed to ex­tend the dead­line for dis­clo­sure of prop­erty op­er­at­ing costs in the in­vest­ment fee or in­di­rect costs to 30 Septem­ber 2018.

The ex­ten­sion on this com­po­nent will help pro­vide ad­di­tional time for dis­cus­sions be­tween ASIC and in­dus­try about how to cal­cu­late these fees.

ASIC has also ex­tended the dead­line for cer­tain dis­clo­sures in pe­ri­odic state­ments that re­quire changes to the in­ter­nal sys­tems of funds.

This is to en­sure the change can be made in a cost ef­fec­tive man­ner.

Those re­quire­ments will have ef­fect for an­nual state­ments for the year end­ing June 30, 2018.

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