The interim report of the FSI draws attention to the fact that superannuation assets are around six times the level they were in 1997 and are now over A$1.8 trillion. Australia has the fourth largest pool of superannuation assets in the world, and is one of only a few countries with pension assets worth more than annual Gross Domestic Product (GDP).In regard to the superannuation, the report noted that, in general, it is difficult to separate these issues from Government policy settings because the size and growth of the superannuation system are largely a creation of Government policy. The report also observed that competition in the wealth management sector appears to be focused more on securing distribution channels and improving product features, rather than reducing fees.Assets held in self-managed superannuation funds (SMSFs) have expanded rapidly relative to the rest of the superannuation system. They are now more than 15 times their level in 1997 and have more than one million members.Despite this, there is little evidence of strong fee-based competition in the superannuation sector, and operating costs and fees appear high by international standards. This indicates there is scope for greater efficiencies in the superannuation system.As a guide, a 38 basis point reduction in average fees for the entire superannuation sector would deliver a total saving to members, and additional funds to invest, of around $7 billion per annum.Superannuation funds compete to attract and retain members. Competition between funds for members has largely been conducted on a non-fee basis, which has led to feature-rich and more costly superannuation products.Some reasons for "lack of optimal outcomes" on the part of super fund members are: Failure to exercise choice; lack of price awareness; lack of interest; agency and structural issues; complexity; lack of comparability and "frictions", eg paperwork.Marketing and financial advice are encouraging individuals to establish SMSFs. However, the quality of advice varies. The Inquiry said it will seek further information on:- the high operating expenses of many SMSFs- limitations on the establishment of SMSFs.