Investments

Investments

Members of superannuation funds have different needs.  AIST recognises that all members should be able to have their investment needs met, whether they are able to make their own investment decisions, or whether they allow their trustees to do it for them. Read more

Select from our range of publications on this topic below: 

 

25 May 2017 - Choice members of ‘for-profit’ funds remain in the dark about poor performance

Millions of Australians are being kept in the dark about the poor performance of their retail super funds.

26 Feb 2016 - Senate Economics: New tax system for Managed Investment Trusts

AIST welcomes this legislation to create a new taxation system for attribution managed investment trusts. We note that the benefits of these bills should be made available to larger funds who invest through mandates. AIST recommends that guidance be provided by the ATO with respect to unit pricing, as well as certainty enshrined in legislation to ensure that there is no resettlement of trusts as a result of amendments to trust deeds which would have CGT effects to investors. We also recommend that the commencement date be postponed to 1 July 2017 in order to allow for the proper implementation of the new rules.

18 Feb 2016 - Review of super a timely opportunity to put spotlight on high fees and underperformance

The Productivity Commission Review of superannuation is a timely opportunity to put the spotlight on the high fees and the underperformance of some funds, particularly in the Choice environment, AIST said today

10 Feb 2016 - Fee report highlights the high price of choice for some Australians

A new report on fees and returns across Australia’s $2 trillion super sector has found that bank and retail-owned super funds offering “Choice” products are charging members up to four times more for underperforming investment options.

13 Mar 2015 - What will the superannuation industry be like in 2025?

A survey of the superannuation industry by AIST and BNP Paribas Securities Services has shown the world we are planning for today will be very different in 10 years' time.

26 Aug 2014 - Renovate the house don’t pull it down – AIST responds to the Financial System Inquiry

The Australian Institute of Superannuation Trustees (AIST) said today Australia’s $1.85 trillion superannuation system is on track to deliver further cost savings and value to members with the recently launched MySuper having already led to significant fee reductions*.

16 Jul 2014 - AIST to provide comprehensive response to the Financial Systems Inquiry interim report

The Australian Institute of Superannuation Trustees (AIST) said today it would begin preparing a comprehensive response on key superannuation issues raised in the Financial System Inquiry’s interim report. AIST CEO Tom Garcia said AIST welcomed the Inquiry’s support of a robust regulatory framework for superannuation, its recognition of superannuation’s important role in the economy, and the need to develop clearer objectives for the superannuation system.

8 Jul 2014 - Regulator crackdown on super fund fee disclosure will benefit consumers

The Australian Institute of Superannuation Trustees (AIST) has today welcomed moves by the Australian Securities and Investment Commission (ASIC) to stamp out misleading fee disclosure practices in the super and managed investment industry. In a report released today, ASIC raises concerns about the practice of ‘fee gaming’, whereby some super products are structured to intentionally disclose lower fees and costs than would otherwise be required.

29 Apr 2014 - AIST CEO on fee debate

AIST CEO Tom Garcia was featured in The Australian today commenting on the fee debate. The piece, “Fee fears forget value debate,” was written by Andrew Main and published on page 19 of the business section.

20 Mar 2017 - RG97 fees and costs disclosure – issues list provided to ASIC

As requested by ASIC in its notification to extend the transition time for RG97, the industry has submitted the attached lists (separated into policy and technical issues).

7 Oct 2016 - External Dispute Resolution Framework

The Government’s review of the financial system’s external dispute resolution framework must carefully consider the needs of consumers. Due to the growth of the superannuation sector the dispute resolution framework must continue to be well equipped to deal with consumer demands and AIST believes that there is scope for improvement. AIST is not opposed to the establishment of a triage service, or a single disputes handling body.

15 Feb 2016 - CP 244: Remaking ASIC class orders on dealing in underlying investments

AIST supports the existing relief granted in Class Orders [CO 02/1161], [CO 02/1073] and [CO 02/1074]. We agree with ASIC’s explanation in paragraphs 11 to 19 of the consultation paper (CP 244) that without the relief, superannuation funds would be required to hold an AFS licence which authorises funds to trade in underlying assets, as well as the need to provide a Financial Services Guide (FSG) for trading in the underlying assets. We support the combining of these three class orders into one instrument together with the other changes described in CP 244.

29 Jan 2016 - Resilience and collateral protection and client money reforms

AIST welcomes measures aimed at improving resilience and stability of Australia’s financial system as well as facilitating participation in international derivatives markets. We support measures aimed at protecting retail clients, and we support efficiencies in wholesale derivatives markets, particularly where participants are Australia’s superannuation funds. We look forward to consultations around margin requirements with APRA, however we point out that any additional costs resulting from margining will be ultimately borne by members of superannuation funds. We note that the largest activity in derivative activity undertaken by funds is with regards to foreign currency hedging.

25 Jan 2016 - Improved Superannuation Transparency

While AIST strongly supports the greater alignment of MySuper and Choice disclosure through the introduction of Choice dashboards, AIST is concerned that certain products (including platforms and legacy products) – in which there is considerable member money invested - are excluded. Alignment of MySuper and Choice is needed to protect members and ensure greater superannuation system efficiency. Greater alignment of Portfolio Holdings Disclosure to consumer disclosure to capture interposed vehicles is also needed.

24 Dec 2015 - Raising professional standards of financial advisers

AIST supports the proposed requirements for financial advisers to require a bachelor’s degree, a professional year and the passing of an exam. We also support the requirement of an industry-wide code of ethics administered by a body chosen by the Minister. AIST submit that the transitional provisions must ensure that practitioners have appropriate time to comply.

31 Mar 2015 - AIST releases submission to final FSI report

AIST’s response to the Government on the Final Report of the Financial System Inquiry (FSI). The FSI Final Report makes a number of recommendations about superannuation and canvasses a range of policy options.

15 Sep 2014 - APRA – Draft reporting standards for select investment options

The Australian Prudential Regulation Authority has issued a draft reporting standards and Discussion Paper seeking views on reporting standards for all RSE licensees to report information in respect of certain non-MySuper investment options, which are referred to as select investment options.

29 Aug 2014 - CP 221 – OTC derivatives disclosure

Derivative transaction reporting is the reporting of over-the-counter (OTC) derivative transaction information to trade repositories, and is a key element of the OTC derivatives reform agenda agreed to by the G20.

26 Aug 2014 - Response to Financial System Inquiry Interim Report

The Financial System Inquiry, chaired by David Murray, has released its interim findings in to the financial system of Australia. This is AIST's response to these findings.

9 May 2014 - Giving effect to the FATCA IGA

In April 2014, the Commonwealth of Australia signed an intergovernmental agreement with the United States of America to improve international tax compliance and implement the US Foreign Account Tax Compliance Act (FATCA). This exposure draft gives effect to Australia’s obligations under this agreement, under which superannuation providers are generally exempt.

31 Mar 2014 - Initial submission to the Financial System Inquiry

The Financial System Inquiry, chaired by David Murray AO, is charged with examining how the financial system could be positioned to best meet Australia's evolving needs and support Australia's economic growth. AIST’s initial submission examines regulation, the issues of adequacy, sustainability and longevity, diversity and governance, systemic risk, ensuring the system delivers and consideration of post-retirement solutions.

7 Mar 2014 - APRA – Draft LPG 270 Group Insurance Arrangements

LPG 270 is designed to outline prudential practices in relation to group insurance. Although its target audience is life companies, AIST has sent this submission as the majority of group insurance contracts involve superannuation funds.

12 Feb 2014 - Discussion paper – Regulation, governance, transparency and competition in the superannuation industry

The Assistant Treasurer released this discussion paper in November 2013, the purpose of which is to seek feedback on governance and transparency issues contained in the Government's superannuation election commitments. The paper also provides an opportunity for consultation on opening up competition and increasing transparency in relation to default employee superannuation fund contributions.

1 Mar 2017 - Fee and performance analysis

AIST has commissioned SuperRatings to examine what consumers are getting from profit-to-member superannuation funds when compared with superannuation funds run for profit (mainly by banks). This research examines over 5,000 investment options and fees, investment returns, and whether the investments underlying the investments are comparable. This report also examines a comparison with a similar report undertaken in 2015 and finds that Choice investment options have remained relatively unchanged regarding fee structures. Choice investment options in the for-profit sector (mainly run by banks) generally provide lower investment returns than the profit-to-member funds and are between 53% to 280% more expensive.

1 Dec 2016 - RG97: Disclosing fees and costs

This report examines how RG97 addresses the key objectives of providing consumer protection, the impact RG97 may have on asset allocations, and examines specific RG97 issues associated with estimations of costs.

16 Nov 2016 - Lifecycle MySuper Product Fees

This research investigates the relationship between MySuper asset allocations, investment fees and member outcomes. It concludes that the majority of funds use a fixed asset allocation that does not vary by age. Lifecycle options (i.e. investment options which do vary by age) are typically used by retail funds, rather than by not-for-profit funds. Where they are used by not-for-profit funds, de-risking (more conservative investments) usually starts at older ages than in retail funds. Building more conservative investment portfolios at earlier ages will see a reduction in member retirement outcomes.

1 Dec 2015 - Fee and performance analysis

AIST has commissioned research through SuperRatings to examine what consumers are getting from not-for-profit superannuation funds when compared with superannuation funds run for profit (mainly by banks). The research examines over 5,000 investment options. The research analyses fees, investment returns, and whether the assets underlying the investments are comparable – what are consumers getting on a like for like basis. A key finding of the report is that, in the Choice space – consumers are paying up to four times more in super fees for some retail funds and usually getting lower return.

3 Aug 2015 - Super Reality Check - Busting the $1 million retirement myth

One of the great things about Australia’s compulsory superannuation is that it is founded on the belief that all Australians deserve a dignified retirement. Yet when it comes to debating the big issues around superannuation – the objectives of the system, the tax rules or indeed, what makes for a dignified retirement - all too often the debate centres on the expectations of high income earners as opposed to what is relevant for the majority of working Australians.

15 Mar 2015 - 2025: What will the superannuation industry look like in a decade

AIST in conjunction with BNP Paribas Securities Services, undertook research to identify key longer-term issues the superannuation industry may face. By asking where you think the industry will be in 2025 we sought to consider how to best shape our industry, overcome challenges and maximise opportunities for asset owners, managers and investors.

15 Dec 2014 - Superannuation projections: A discussion paper

AIST commissioned research to consider the design and regulatory treatment of superannuation projections. The aim of the research was to explore how the value of static superannuation projections to members can be improved. The research also examines interactive superannuation calculators by way of comparison with static superannuation projections.

15 Jul 2014 - Navigating the new MySuper landscape

AIST commissioned RiceWarner to examine the extent MySuper has delivered on its promise of improved retirement incomes, the characteristics of common MySuper investment solutions, the differences and similarities between MySuper products and "lookalike" products, and emerging trends in the evolution of MySuper products.