Super funds in fee rip-off

Major players admit to charging for no service

A NUMBER of Australia’s large superannuation funds, including the already scandalhit AMP, have admitted to charging consumers fees for no service.

The banking royal commission has previously revealed Australia’s largest wealth manager AMP charged customers fees for financial advice they did not receive.

AMP has also admitted to issues with fees for no service regarding superannuation, as the royal commission shifts its focus to Australia’s $2.6 trillion super industry.

Senior counsel assisting the commission Michael Hodge QC (pictured) said a number of super fund trustees have admitted misconduct or possible misconduct concerning fees for no service.

“AMP, CBA and IOOF have acknowledged fees-forno-service conduct that we believe must have affected the trustee or trustees of the superannuation fund within their respective retail groups, although they may not have made that specific link in their submissions,” he said in Melbourne yesterday.

National Australia Bank’s superannuation trustee NULIS has also acknowledged it engaged in misconduct or conduct falling below community standards and expectations in relation to superannuation, he said.

During an opening statement yesterday, Mr Hodge also mentioned other industry players such as ANZ, Westpac and StatePlus in relation to consumers being incorrectly charged fees or for paying for advice they did not receive.

Public submissions to the royal commission about superannuation have also raised concerns about fees-for-noservice, as well as the provision of insurance by super funds that consumers had not sought.

Mr Hodge said concerns have been raised about fees for financial advice, management or administration that have not been disclosed to the consumer or resulted in any service being provided.

He gave an example of a fund charging ongoing management fees without adequate explanation after three years of those fees being charged.

Mr Hodge said the examples also included inappropriate fees charged by financial advisers, including a consumer who was charged adviser fees despite taking out the superannuation policy directly with the super company in the absence of a financial adviser.

The $2.6 trillion industry is to be taken to task over whether funds act in the best interests of Australians.