Chief vows to give dud super a boost

THE new manager of some of Australia’s worst super funds has told hundreds of thousands of long- suffering account holders that if his company can’t do better they should leave.

Australian financial services company IOOF is in the process of taking control of ANZ’s $ 47 billion worth of pensions and investments, including products widely regarded as the biggest duds on the market.

Stockspot, which publishes the Fat Cat Funds Report, recently named ANZ as the fattest fund manager in the nation – for the fourth year running.

Stockspot founder Chris Brycki is particularly critical of ANZ’s OnePath range.

“The two factors that matter most when it comes to investment performance is what assets the fund invests in and how much the fund charges in fees,” Mr Brycki said.

“Year after year we see the same suite of OnePath funds making up a large number of the Fat Cat Funds category because they charge excessively high fees relative to other products on the market.

“ANZ’s sale … to IOOF could herald a reduction in fees if IOOF has the decency to do what’s right for investors in these funds.

“They have a choice to do what’s right or do what the banks have been doing for years – continue to profit at the expense of Australian’s retirement.”

ANZ’s head of superannuation Mark Pankhurst said it only won Stockspot’s fattest fund every year because ANZ names its funds in a way that generates duplications.

And the listed fees were much higher than what customers actually paid. That made net returns look lower than they really were.

“I have to win it because of those things,” Mr Pankhurst said.

Still, ANZ has recognised many of its products weren’t up to scratch.

Since 2014, it has shifted $ 7 billion of super owned by 240,000 customers out of expensive, poor- performing products at a bottom- line cost of $ 100 million.

These customers were in funds with fees of as much as 2.3 per cent and are now in ones that only charge 0.6 per cent, saving a typical account holder $ 30,000 over a lifetime.

Mr Pankhurst denied the ANZ portfolio was a dud.

“If it was so crap, IOOF wouldn’t have bought it,” he said. ANZ was only selling because, like other banks, it had decided wealth management wasn’t its bread and butter, he said.

IOOF has agreed to pay $ 975 million in cash to ANZ with the deal due to settle in October.

IOOF managing director Chris Kelaher said the most attractive aspect of the acquisition wasn’t the accounts management rights but rather the side- deal to be able to market IOOF products to ANZ’s millions of customers.

Still, Mr Kelaher said the 770,000 account holders who will come across from ANZ had every right to expect better.

“This our core area,” Mr Kelaher said. For a bank it was just a “parallel” service.

“We will be looking to actively improve your outcome from a service, advice and performance level,” he said.

“You will have to do absolutely nothing. And if you don’t like it, you could opt out and transfer somewhere else.”