POWERED BY MOMENTUM MEDIA
Industry funds attack commissions-based advice
The Industry Superannuation Funds Network (ISFN) has raised both the AMP enforceable undertaking and the issue of shelf fees as clear arguments against the provision of commissions-based financial advice in the superannuation industry.
In a submission to the Parliamentary Inquiry into structure of the superannuation industry, the ISFN called for changes to the legislative obligations governing the provision of financial advice “to increase the professional duties imposed on financial advisers and ban commissions on superannuation guarantee payments”.
The submission went on to argue that commissions, particularly trailing commissions, significantly undermined retirement savings.
“Trail commissions are funded by the fund manager deducting a payment that would typically range between 0.4 and 1 per cent of invested funds and paying this amount to the adviser for the entire period that the client remains in the product,” it said. “The ongoing nature of this commission means that it eats into the client’s savings and is magnified by the impact of compound interest.
“Given the erosive effects of percentage-based fees notionally charged by advice, the ISFN recommends that commission-based charges for advice funded from the superannuation product be banned,” the submission said.
AUTHOR
Mike Taylor
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
