Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Superannuation funds need to do much better in explaining complex financial information to their members.
New research shows while industry super funds do a better job in unravelling the financial services they provide to the masses, they still fall short of providing the clarity needed to make informed decisions.
Consultants Ethos CRS analysed the readability of documents produced by 20 of the largest superannuation funds in Australia.
Using its readability scorecard, it found not one of the 80 documents provided by the 20 funds came close to reaching the desired benchmark readability score of 100, with the average just 45.6.
The scorecard is based on the idea that fund members should be able to easily read what their funds put in writing so they can make informed financial decisions.
“These findings suggest that super funds still have some work to do if they are to engage clearly and effectively with fund members,” Ethos CRS chief executive officer Chas Savage said.
CareSuper topped the rankings of readability with a score of 49.4, followed by HESTA with 49.2. There was just one retail super fund in the top 10.
Over 12 million Australians have a super account, and over four million have more than one account.
Yet Ethos CRS says only 35 per cent of Australians know the actual value of their super, and estimates only one in two adult Australians are financially literate.
Mr Savage said the decision to invest with the right superannuation fund is important.
“All super funds face the challenge of delivering complex information to a diverse range of members and levels of financial literacy vary widely,” he said.
“This means that super funds must be clear when discussing the financial services they provide, the performance of funds they manage, and the rights and responsibilities of fund members.”
If you are not sure of anything, your Financial Adviser can help.