Given the pending reality of the RDR we have had an obvious focus (both in terms of articles and client work commitments) to the UK retail fund market , there are however a number of really interesting ‘RDR type’ discussions taking place in other regions where we work with clients.  These discussions are at various stages but are always worth keeping an eye on.

In Australia the industry has been actively responding to the MySuper legislative program.

The key features of MySuper will be:

  • new duties for trustees, including a specific duty to deliver value for money as measured by long-term net returns, and to actively consider whether the fund has sufficient scale;
  • a single diversified investment strategy, suitable for the vast majority of members who are in the default option;
  • comparable data on long-term net returns published by APRA;
  • restrictions on unnecessary or excessive fees, including:
    • banning commissions in relation to retail investment products and group insurance;
    • new standards for the payment of performance fees to fund managers;
    • a ban on entry fees charged to new members;
    • exit fees limited to cost recovery; and
    • switching fees not payable to the trustee in their personal capacity;
  • a fair and reasonable allocation of costs between MySuper and other products;
  • standardised reporting requirements written in plain English;
  • a requirement to accept all types of contributions; and
  • life, and total and permanent disability (TPD) insurance (where available, depending on occupational and demographic factors) offered on an opt-out basis.

The other legislative discussion that will resonate is the current consultation (and interpretation) of the Future of Financial Advice (FOFA) .  We though this sub-headline from a recent press article would be familiar;

financial advisers remain concerned about what the changes will mean for their businesses.

The linked article above provides useful links for further reading from Money Management.

We will continue to keep a watchful eye on developments are save relevant material under the FOFA category of this blog.    If you want to follow along – why not set up a RSS feed into your outlook account (or maybe Google reader)?