Things aren't as bad as they seem in the world of superannuation, but your clients may well be getting seriously overcharged in fees, believes Superannuation Minister Bill Shorten.
Speaking at the launch of ANZ’s latest superannuation offering, ANZ Smart Choice Super, last week, Shorten attacked what he sees as a needlessly high-fee culture within superannuation.
“The level of fees that you pay over a 30 to 40-year period can, and does, and will make a big difference to what you get when you retire. With Australians paying on average around 120 basis points for their superannuation, I believe – and the government believes – we need to put downward pressure on fees in superannuation,” he said.
“I do not believe the system costs 120 basis points on average to administer and to manage. That is why the government, the Gillard government and myself as minister, is delivering MySuper.
“That is why the government, the Gillard government and myself are delivering Stronger Super and the other changes we’re making.”
He added, however, that there is more good news in the Australian superannuation story than bad, before trumpeting government initiatives in the area.
“It becomes fashionable sometimes to say that superannuation’s a problem. I actually think there’s a lot of innovation going on at the moment in superannuation,” he said.
Noting that recently released data shows that the value of Australian superannuation savings is $1.5 trillion – representing a 13% annual increase – Shorten stated that the nation’s super pool was expected to be one and a half times the size of Australia’s GDP within 20 years.
“I hear periodically doom and gloom in terms of the economy. The fact is that our retirement nest egg growing at a double-digit rate should give Australians confidence,” he said.
Overall, he stated that Australia’s superannuation system is the envy of the world. It currently represents the fourth largest funds under management market in the world, said Shorten, and will move up to third thanks to the effect of Labor government policies.
“Ladies and gentlemen, there aren’t a lot of things that Australia comes third in the world at,” he said.
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