Lack of transparency in Australia's funds management industry not only lags global standards, it could also be deteriorating retirement savings, according to a new study.
Commissioned by Monash University's Australian Centre for Financial Studies (ACFS), the report urges greater transparency in the Australian funds management sector.
Consequently, it questioned if the superannuation industry is running efficiently and fairly, given there is no standardised system in place to measure returns or describe investment strategy.
Any misalignment between super funds, fund managers and investors may create long-term deterioration on retirees' retirement savings, warned Monash University associate professor Paul Lajbcygier.
The report suggests one way the Australian funds management and superannuation sectors could be brought in line with US disclosure standards, which is ranked among the best in the world. It suggests government agencies should collect monthly portfolio holdings of all managed funds and published within 90 days, along with fund executives' age, tenure, and compensation structures.
A 2015 Morningstar report ranked Australia equal last with South Africa out of 25 countries for transparency.
Lajbcygier said monthly portfolio holdings data will allow stakeholders to examine and expose portfolio manipulation behaviours of all fund managers.
Access to this data will also enable researchers and investors to accurately assess active management of shares and whether high fees are justified as the performance attributed to managerial skills of actively managed funds is poorly reported, he added.
"As a result, it is difficult to differentiate whether the reported performance is a consequent of superior managerial skill or if it is due to other factors such as portfolio manipulation," he said.
ASIC has attempted to regulate super funds to publish portfolio holdings - this has been pushed back three times since 2014, with the first reporting day for the disclosure requirement now December 31.
Publishing details of managerial compensation and fee structures may increase competition in the sector and help investors make informed decisions when choosing funds, Lajbcygier said, noting they can then decide if investment managers are actually motivated to achieve the best results for them.