Fees only part of equation: Russell
Reducing the cost of superannuation is not just about fees and charges but also about improving investment processes and operations within superannuation funds, according to Russell Investments.
Russell co-chair of global consulting Don Ezra has reinforced the point to an Australian Institute of Superannuation Trustees luncheon, saying that while Russell welcomes the debate around fees, there are other ways available to maximise superannuation savings for fund members.
“Superannuation funds can improve their implementation techniques by simply reducing unnecessary trades in multi-manager portfolios and reducing unwarranted transition management and foreign exchange trading costs,” he said.
He said that a transition management transaction could cost a fund up to between 60 and 180 basis points per transactions.
Ezra said that as well as ensuring better implementation, superannuation funds could help members improve their strategies in three ways: encouraging the use of a target date approach, assisting members with skilling up on basic financial education and helping members draw down on their superannuation gradually.
AUTHOR
Mike Taylor
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