Rainmaker found the average superannuation fund member was paying 1.23 per cent of his or her account balance in fees, which sounds small but represents a significant lost opportunity from the compound interest forgone on money not saved.
A separate study by Rice Warner for the Financial System Inquiry five years ago found that overall fees had fallen from 1.3 per cent in 2004 to 1.1 per cent a decade later, but it noted that this reduction was considered too modest by some.
Hume, as the new Assistant Minister For Superannuation, now ventures where other ministers have gone before with mixed success.
A decade ago, Nick Sherry was the minister responsible for super in Kevin Rudd’s government. He warned that fees were too high and that trailing commissions – those costs you might continue to pay for investment advice you arranged years ago – should be scaled back.
It took years for the Labor government to make headway on that ambition. And when it put forward the Future of Financial Advice reforms, or FoFA, it found the Coalition joined forces with the industry to fight the changes every step of the way.
The lesson from that experience is similar to the lesson from the banking royal commission. The Coalition’s first instinct was to dismiss the need for the strongest action when Labor called out a problem.
Hume has identified a real and pressing problem for every Australian worker, although the cost naturally varies according to income and age. Yet the history shows that it takes very difficult reform, usually resisted by the industry, to get results.
The onus is on the Morrison government to prove it can do so.