E1. Are longterm Proportion of default Regulator data; Supported. net investment products that persistently research firms If the measure is to satisfy consistency and level-playing field returns being underperform the benchmark norms, it must address default investment options within retail maximised over (for 5 or more consecutive master trusts, not just the default option within default funds members’ years) (output) named in industrial awards and agreements. While there is no lifetimes, taking "default product" for SMSFs, it would be useful to compare the account of risk? performance of the SMSF sector as a whole with defaults. E2. Are costs Costs relative to assets and Regulator data; Agreed. incurred by funds number of accounts by research firms; However, AIST notes that costs incurred by a fund are frequently and fees charged service (investment and fund disclosures opaque, especially in the investment management space where to members administration) and by they are typically netted off from declared returns. Fees charged being minimised, market segment (input) to members can be disguised and manipulated, both by using a taking account of combination of flat rate and % fees and by using cross-subsidies, service features whether from particular employers or from within a vertically provided to integrated business where the investment arm can finance members? aspects of the fund operation without an overt fee.
E1. Are longterm net investment returns being maximised over members’ lifetimes, taking account of risk? Proportion of default products that persistently underperform the benchmark (for 5 or more consecutive years) (output) Regulator data; research firms Supported. If the measure is to satisfy consistency and level-playing field norms, it must address default investment options within retail master trusts, not just the default option within default funds named in industrial awards and agreements. While there is no "default product" for SMSFs, it would be useful to compare the performance of the SMSF sector as a whole with defaults. E2. Are costs incurred by funds and fees charged to members being minimised, taking account of service features provided to members? Costs relative to assets and number of accounts by service (investment and administration) and by market segment (input) Regulator data; research firms; fund disclosures Agreed. However, AIST notes that costs incurred by a fund are frequently opaque, especially in the investment management space where they are typically netted off from declared returns. Fees charged to members can be disguised and manipulated, both by using a combination of flat rate and % fees and by using cross-subsidies, whether from particular employers or from within a vertically integrated business where the investment arm can finance aspects of the fund operation without an overt fee.