Fight between SMC and FSC on super rages on

The Super Members Council (SMC) has called out the Financial Services Council (FSC) on making selective claims about performance and costs of 'platform' super funds compared with performance-tested mainstream MySuper funds.

A latest research by FSC conducted by NMG Consulting found making relatively simple decisions early in a person's working life, such as switching to a lower-fee or higher-growth superannuation option, can substantially increase retirement savings compared to remaining in a default MySuper product.

SMC represents industry funds that provide default MySuper products such as AustralianSuper, Australian Retirement Trust (ART), HESTA and UniSuper. On the other hand, FSC represents the retail super funds including AMP, Mercer, Colonial First State and platform providers such as BT Financial and HUB24.

SMC has disputed FSC's report stating members of platform super products typically pay higher administrative fees, have lower exposure to growth assets and have lower risk-adjusted returns.

The SMC also stated FSC's asserted financial benefits of platforms exclude the cost of advice, while having an ongoing adviser is an inherent requirement for most consumers invested on super platforms.

"Rather than switching to more complex and costly products where higher fees can erode their super, most consumers would be best served by taking simple and practical initial steps to grow their retirement savings using tools, support and guidance available at no cost or low cost from their own trusted mainstream super fund," SMC said.

However, FSC report suggested an individual who switches to a lower-fee investment option from age 30 could retire with up to $1.2 million from a default MySuper fund to a high-growth option at the same age could increase retirement savings by as much as $690,000.

FSC chief executive Blake Briggs said greater engagement with superannuation at key life stages could materially improve long-term financial outcomes.

He added policy proposals that make it harder for Australians to exercise control over their superannuation will directly harm their financial wellbeing.

The research by FSC challenged the perception that platform products are inherently more expensive than MySuper and finding compact and mini wrap platforms can offer comparable fees, particularly for higher account balances.

Earlier in the year, FSC also questioned SMC's research which found a spike in younger members switching out of industry funds into self-managed super funds (SMSF) and platform products.