A few years back, the corporate regulators did the fund managers a big favour.
Capitulating to lobbyists for the peak body now known as the Financial Services Council - and with some prodding by the big funds themselves - the Australian Securities and Investments Commission carved out a nice exemption for its fundie mates from having to disclose fees.
By way of background, industry funds have delivered better returns than their more glamorous retail brethren over the years - the difference in performance has roughly equated to the higher fees charged by the silvertails of the retail sphere.
Anyway, the peak body for the MLCs, Colonials and AMPs of the world swung an exemption from having to disclose their fees. Heaven forbid the mums and dads could easily compare their blatantly higher fees with the more modest rake-off by the likes of the Meat Industry Employees' Superannuation Fund. MLC, in particular, was involved in moulding the regulations thanks to an executive on secondment.
It was especially coy, though, this week when approached for a discussion on fees and exemptions.
It took no fewer than 10 days to get a straight answer out of this richly resourced investment institution (MLC is owned by National Australia Bank).
Initially, we were advised the MLC superannuation calculator (with which potential investors can tap in their financial details and get an idea of fund performance and so forth) was an educational tool and not something designed to provide financial advice. It certainly did not appear to be too educational on the fee disclosure front, revealing, as it did, a mere 0.5 per cent admin fee and not the rest.
By day three of our campaign to get a straight answer, the line was that the calculator did actually provide financial advice, but the funds had an exemption from providing "proper advice".
An exemption from providing proper advice? That's right. ASIC had granted a relief order for providers of financial calculators from the disclosure requirements of the Corporations Act.
To be fair to MLC, the other big fund managers were in the same boat. They enjoyed the same exemption. Though the MLC calculator did seem a tad cagier on the fee front, suggesting that with a mix of 85 per cent shares and property and 15 per cent cash and fixed interest, investors could expect a return of 8 per cent after fees. The AMP super calculator, by comparison, suggested that an 85 per cent growth and 15 per cent defensive mix would return 6.5 per cent before fees in an average market. Nonetheless, by day six of our quest for a straight answer, the line was that the calculator was Future of Financial Advice compliant. But if that was the case, why did MLC require the relief?
The calculator was clearly a marketing tool that gave personal financial advice. But MLC did not see it that way. "A calculator is not advice, which is why we encourage people to seek professional financial advice after using the calculator and this is clearly noted on the website/calculator. It is an educational tool." Day seven: if you have an exemption from providing reasonable advice does that mean you can provide unreasonable advice? "I've always said that a calculator is not advice. We don't have anything further to add."
By day eight we were feeling a twinge of pity for the PR person who was being pushed into the front line. Surely the lawyers and technical people could get on the phone. Then this arrived: "Our commitment is to ensure we are delivering clear information in an open and transparent way to our customers. In order to ensure that is the case we have decided to review our calculator, to see whether there are any areas we want to improve. The calculator will be temporarily unavailable while we do that."
■Dear, dear old Energy World. Our favourite LNG company held its annual meeting on Friday. The 50-strong attendance was treated to a slideshow of EWC's global operations, and it certainly looked as though there was something LNG-ish going on at the Indonesian site - what with all the big cold boxes being craned in and smiles on faces. Although all mentions of the 2.5 million-tonne LNG plant proposed for the Western Province of Papua New Guinea, along with a deepwater port and power station, had vanished from the annual report, directors said they saw "opportunities in PNG going forward".
As revealed here last year, the PNG project appeared to have been accidentally located (at least in a company presentation) on space pegged by US oil group Talisman.
■Finally, a clarification. In a column two weeks ago about the $23 million federal government grant to Bindaree Beef orchestrated by Tony Windsor a couple of months before the election, we mentioned Bindaree had previously tipped into insolvency - after getting millions of dollars in federal and Queensland government grants. Bindaree assures us the only grant it had received was $800,000 from the Queensland government.