Rest calls for better alignment in default options

Rest conducted a survey addressing concerns around the ambiguity of standardised investment options and product labels.

As a result, the industry fund is now calling for the government to strengthen alignment within the industry.

The survey collected responses from some 1450 member and identified just over one in three respondents found super and retirement products easy to understand.

Additionally, more than four in five (84%) said clearer, plain-language super and retirement products would make it easier for them to understand and compare options.

Observing this, Rest chief investment officer Michael Clancy said providing consistent and standardised investment options would not only provide better clarity but also improve consumer protections.

"We believe the inconsistent labels applied to investment options is a significant contributor to this confusion. It can be very difficult for members to make like-for-like comparisons of product features and risk levels," Clancy said.

"Many funds offer an investment option named Balanced, for example, but there can be a wide disparity in these options' individual risk and return profiles. One fund's Balanced option can be very different to another fund's option with the exact same name.

"This makes it hard for members to make meaningful comparisons and, worse, can inadvertently expose them to a level of risk they may not be comfortable with were they better informed."

He reiterated standard labels could prevent losses that occur when consumers enter options or products they do not understand and aligns with Treasury's consultation to emphasise consumer protection in super switching.

As such, Rest is calling on the government to work with industry to develop a standardised labelling framework that applies consistent risk categories and descriptors across comparable investment options.

"Members could benefit greatly from standardised investment labels that apply consistent definitions for different risk categories like Conservative, Balanced and Growth," Clancy added.

"A framework based on standardisation and consistency would improve transparency and allow members to make more meaningful comparisons as well as better-informed decisions."

The findings build on the work the government has already undertaken to develop a product labelling regime for sustainable investment products in July 2025.