The Industry Super Network (ISN) is urging financial advisers to recommend industry super funds, saying the decision should be based on their long-term net returns.
ISN chief executive officer David Whiteley pointed to figures recently published by SuperRatings, which show industry super funds had outperformed retail funds by 1.67 percentage points over a rolling seven-year period, and 1.84 percentage points over a 10-year period.
"In the seven and 10-year periods industry super funds have performed particularly well - which are most important given the long-term nature of superannuation," Whiteley said.
Whiteley said the financial advice industry should take a close look at those figures before recommending super funds to clients.
"Under new laws, financial planners are required to act in the best interests of their clients," he said.
"Given that fund performance is one of the most important factors in choosing a super fund, industry super funds should come out on top in the recommendations of financial advisers to their clients."
Whiteley said the outperformance of industry funds could be attributed to their ‘low fees and no commissions' philosophy, strong investment in unlisted assets such as infrastructure, and the trustee model under which they "act only in the interests of members".
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
Add new comment