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Hewison Private Wealth - Insights
Hewison Insights

It’s time for public super funds to open up

Andrew Hewison
Managing Director
16 Jan 2012

At Hewison, we pride ourselves on full transparency and disclosure when providing clients with strategic, personalised wealth management. We believe our clients have a right to be fully aware of where their money is going, who they are paying to manage it, and how much they will have to pay.

We also manage more than 400 self-managed superannuation funds and believe our clients are entitled to full transparency and disclosure regarding their investments.

What’s concerning is that our competitors, public superannuation funds, retail and industry funds, are not required to provide their clients with the same level of transparency.

Instead, clients of retail and public offer funds make a broad investment option selection at the time of investment, such as choosing to invest in either a conservative, balanced or a growth option. They are not privy to specific investment information, such as ‘the growth option includes investment in BHP, ANZ and QBE’. This seems outrageous; surely every investor has the right to know what they’re investing in?

It was therefore a refreshing change to read in the Australian Financial Review last week (Wednesday 12 January 2012, Page 1 ), that the Australian Securities Investment Commission (ASIC) Chairman, Greg Medcraft, is preparing a plan to force superannuation funds and their money managers to fully disclose to members where their $1.8 trillion is invested.

The intention of the plan is to improve disclosure of the industry which is among the worst compared with our United States and United Kingdom counterparts who are required to disclose investment holdings several times per annum.

Mr Medcraft states in the article that “the person who has the most skin in the game is the investor and they should be entitled to see what is in their own underlying fund”.

In terms of overall risk, he added that superannuation tends to form part of a person’s overall investment strategy and the investor needs to know exactly where their money is invested to ensure appropriate diversification across their wealth management strategy.

His point is a valid one and I welcome Mr Medcraft and ASIC’s push for greater transparency of the superannuation and investment industry. For decades now the funds management sector has been structured in a way that allows the pockets of managers and advisers (via the commission payment system) to be lined before those of the investors. It now appears as if the tide is finally turning.    

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.