Accounting and advisory firm Deloitte has backed a claim by the industry superannuation lobby, dismissed by Assistant Treasurer Kelly O'Dwyer, that new disclosure laws for super choice products will exempt about 72 per cent of the retail sector.
Under the proposed changes, to take effect from July 1, 2016, funds in the "choice" part of the market will have to produce a standardised product disclosure "dashboard".
All MySuper products, the no-frills super accounts eligible to be nominated as a default fund for workers in enterprise agreements and awards, must already do this.
The dashboards present vital statistics – such as investment performance, fees, and indirect costs – in a simple format to make it easier for consumers to compare funds.
Industry Super Australia, the lobby group for union-aligned superannuation funds, said last week that a study it commissioned from research house Rainmaker showed a carve-out for most investment options available through platforms would mean about 72 per cent of the $572 million retail market was exempt from having to produce dashboards.
Ms O'Dwyer dismissed this claim, telling Fairfax Media the rules did not favour bank-owned or other retail funds.
"All funds, including retail, industry and corporate, would be required to provide product dashboards for their top 10 options under the proposed legislation," she said.
Deloitte partner Ben Facer said that while the law was drafted in a manner that makes no theoretical distinction between the non-profit and for-profit players, in practice the carve-outs would mean the bulk of the retail sector was exempt from compliance.
"The fact is that the bulk of the retail sector is managed through platforms, some of which have more than a thousand investment options on them and many of which have single-product options to which the exemption applies, while very few industry funds have more than 10 investment options and very few offer single-product options."
Platform-based super providers allow individuals, usually with the guidance of a financial adviser, to choose from a wide range of investment options.
Mr Facer, who advises retail and industry super funds clients, said the logic for limiting the dashboard rules was not clear.
"They already collect the underlying information required and the process of populating a standard dashboard with that data should be able to be automated quite simply," he said.
A spokesperson for National Australia Bank said the draft provisions were "an effective balance between transparency and overly complex and costly designs that could negate outcomes for consumers".
Industry Super Australia deputy chief executive Robbie Campo refuted this.
"As the intent of dashboards is to allow like-for-like comparisons of all options, they should be required for all investment options, even single-asset, single-investment-manager options, not just pre-mixed options," she said.
Rainmaker head of research Alex Dunnin said the exemptions were "absurd".
"This pretend reform begs the question that if the government believes the dashboard disclosure rules for multi-choice 'select' funds are too onerous or not relevant then why not just say so rather than waste everyone's [and Parliament's] time bringing in laws that won't apply across the board."
Mr Dunnin said the exemption indicated an impressive lobbying effort.
The Financial Services Council, the lobby group for bank-owned and other retail wealth managers, has said it supports the draft law reforms as they stand.