Su­per fee lob­by­ing

Townsville Bulletin - - Investor -

THERE is strong con­sumer s up­port f or more t r ans­par­ent charg­ing for fi­nan­cial a d v i c e , i n c l u d i n g b e i n g prompted an­nu­ally to con­sent for any on-go­ing fees to be de­ducted from sav­ings by fi­nan­cial plan­ners, ac­cord­ing to the In­dus­try Su­per Net­work.

The net­work said the fi­nan­cial ad­vice in­dus­try was in­volved in an un­prece­dented lob­by­ing cam­paign of all fed­eral politi­cians to wa­ter down the Gov­ern­ment’s Fu­ture of Fi­nan­cial Ad­vice re­form agenda.

They are propos­ing that con­sumers should have to ac­tively ‘‘ opt out’’ of pay­ing on-go­ing fees which many con­sumers are un­aware they are be­ing charged.

A sur­vey, con­ducted by Newspoll for the net­work found al­most nine in 10 re- spon­dents ( 89 per cent) be­lieved there should be a law re­quir­ing fi­nan­cial plan­ners to act in the best in­ter­ests of their clients. Of those who had used a fi­nan­cial ad­viser, 85 per cent of re­spon­dents also ex­pressed a pref­er­ence for pay­ing for fi­nan­cial ad­vice via a set fee or hourly rate, as op­posed to hav­ing on­go­ing fees de­ducted from their in­vest­ments such as su­per­an­nu­a­tion.

Nearly 75 per cent favoured an­nual re­newal of on-go­ing fees ( opt-in) rather than the opt-out model ad­vo­cated by the plan­ning in­dus­try.

The net­work’s CEO David Whiteley said the poll made clear that con­sumer ex­pec­ta­tions were aligned with the gov­ern­ment’s stated re­form agenda.

‘‘ Con­sumers clearly ex­pect full trans­parency on fees, and are sup­port­ive of the gov­ern­ment’s agenda,’’ Mr Whiteley said.

‘‘ This re­search shows that con­sumers un­der­stand that the qual­ity of the ad­vice they can ex­pect from plan­ners is in­ex­tri­ca­ble from the way in which they are paid.

‘‘ If fi­nan­cial plan­ners as­pire to be pro­fes­sion­als, then they must charge like other pro­fes­sion­als do – by an hourly or set fee paid by the client rather than vol­ume­based pay­ments from prod­uct providers, and to get an­nual per­mis­sion from clients to con­tinue de­duct­ing on-go­ing fees from clients in­vest­ments.

‘‘ The fi­nan­cial plan­ning in­dus­try has gone through count­less scan­dals, such as Storm and West­point, and is clearly suf­fer­ing a cri­sis of pub­lic con­fi­dence.

David Whiteley

‘‘ De­spite this, the in­dus­try con­tin­ues to op­pose the gov­ern­ment’s re­forms which are de­signed to pro­hibit con­flict of in­ter­est-based re­mu­ner- ation, such as com­mis­sions and vol­ume re­bates and pro­vides for an an­nual re­newal of ser­vices.

‘‘ There is clearly an ex­pec­ta­tion within the Aus­tralian com­mu­nity that the Par­lia­ment should act against un­sus­tain­able prac­tices that were erod­ing pub­lic con­fi­dence in our fi­nance sys­tem.

‘ ‘ Con­sumers un­der­stand that how much they pay in fees and com­mis­sions af­fects their fi­nal su­per pay­out.

‘‘ Conflicts of in­ter­est cre­ated by the com­mis­sions sys­tem im­pact not only on in­di­vid­ual re­tire­ment sav­ings but also on ag­gre­gate na­tional sav­ings.’’

The Newspoll sur­vey was u n d e r t a k e n a m o n g a na­tion­ally rep­re­sen­ta­tive sam­ple of 1200 re­spon­dents aged 18 years and over from Fe­bru­ary 11 - 13.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.