YFYS has turned past performance into future performance guide

After years of “past performance is no guide to future performance” disclaimers, superannuation funds are now being guided by past performance, according to Sunsuper.

Speaking at the Association of Financial Advisers (AFA) conference Brian Parker, Sunsuper chief economist, said the Your Future, Your Super (YFYS) performance test would drive behaviour in the industry.

“Anybody who’s worked in corporate life for an extended period of time will know that scorecards drive behaviour; what you’re going to be judged against ultimately drives your behaviour,” Parker said.

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“And so, if we’ve now said to super funds this is how you’re going to be assessed, you are going to see this processed embedded into the investment decision making, rightly or wrongly.

“Those of you that have read a product disclosure statement – and I hope you all have – there’s a line there saying past performance is no guide to future performance, that’s unfortunate because we’re now telling members that it is.

“Even though seven or eight years is a meaningful time frame to consider, the fact is we are considering the performance of super funds based on past performance and benchmarks they may not have been managing against.”

Parker said the Australian Taxation Office (ATO) website would become the “ultimate source of truth” for members to get information on super fund performance.

Despite firms like SuperRatings and Chant West publishing “leader tables” for performance, it would not “move the dial” in the same way information on the ATO website would.

“One of the things we see happening over the next while is the ATO website may well become the ultimate source of truth when it comes to performance comparisons between different funds and these are going to become much more commonplace than they had been to date,” Parker said.

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