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Call for compulsory annual reporting on adviser trails
Superannuation funds should be required by law to inform members if they are being subjected to the payment of trailing commissions to financial advisers, according to the nation’s largest industry superannuation fund, AustralianSuper.
The big fund also wants grandfathered commissions to be banned.
The fund has used a submission to the Productivity Commission to back the proposition that the “the Australian Government should require superannuation funds to clearly inform, on an annual basis, all members who are subject to trailing financial adviser commissions”.
At the same time as the future of grandfathered commissions come under scrutiny as a result of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, AustralianSuper said it “supports any proposal that seeks to make it clear to members that they are paying trailing commissions to a financial adviser”.
“AustralianSuper suggests that this may not be sufficient to protect members, particularly those in cognitive decline who continue to pay a trailing commission,” the submission said. “Also, this does not address the issue of what action a member may initiate if they do not want to pay trail commissions anymore.”
“AustralianSuper supports appropriate legislative measures that would ban grandfathered trailing commissions.”
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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