CFS research highlights super advice fees
The ability of superannuation fund members to deduct advice fees from their super accounts has been reinforced by CFS Superannuation chief executive, Kelly Power, allied to the release of new research suggesting one in 10 are unaware of this fact.
The latest CFS Empowered Australian report revealed that two in three Australians want to see the Government implement changes to make financial advice more accessible.
The report also identified significant gaps in consumer awareness of how advice can currently be access, with nine in 10 Australians admitting they were unaware they cold pay for advice using their superannuation.
Based on a survey of 2,250 Australians, the research found that women are more likely than men to be disproportionately impacted by their financial situation, with one in three saying their mental health has been negatively affected compared to one in five men.
In addition, women (67%) and Australians aged 40 to 49 (71%) are the most eager to see legislative changes from Government that will improve access to financial advice.
Commenting on the findings Power said Australians support the Government making financial advice more accessible.
“With the Government re-elected, there is now an opportunity to complete these important reforms, to make it easier for advisers to provide more advice to more Australians. We should not lose sight of the fact millions of Australians will be approaching retirement over the coming decade and the current framework will mean too many are unable to access the help they will need,” Power said.
“As Government starts developing new guidance on super and retirement, this should also inform all Australians that if the financial advice relates to issues associated with how you could use your super to save for retirement, the cost of that advice can be deducted from your super account,” she said.
“For example, if you are approaching or entering retirement, you can speak to a financial adviser about critical issues such as contribution levels, how to setup your pension and regular payments, and investment strategies that can give you more confidence about how long your savings will last. The financial adviser’s fees for that advice can be deducted from your super account.”
Previous CFS research found that Australians who receive advice are more than twice as likely to feel financially prepared for retirement and twice as likely to retire at a time of their choosing compared to those who do not receive advice.
It’s as if the Hayne RC never happened.Plus most are not aware advice fees are already being deducted from your Union Super Fund without your consent or knowledge, for advice you may never receive.
Really? I expect youre confusing bog standard admin fees, which cover member services such as contact centres, websites, PDSs, general advice tools and so on. No fund to my knowledge itemises these member services, so you could make the same ‘fee for no service’claim if a member never visits the fund website, reads a PDS or calls the fund.
I’d be very interested if you could name a single industry fund that charges every member an individual personal advice fee that they might never take advantage of.
Intra-fund advice fees are personal advice fees charged to every member of a superannuation fund, whether in industry or retail funds regardless of whether they receive advice. This effectively amounts to a “fee for no service.”
For example, I have clients who already pay me directly for personal advice, yet they are still being charged additional hidden fees through their fund’s administration costs for intra-fund advice they don’t use. This is no different from the previously banned commission model, where a portion of admin fees was paid to advisers, regardless of service.
The only difference is that one model was demonised as conflicted and banned impacting small businesses and client choice, while the other has been rebranded and allowed under the guise of being “in the public interest.
Spot on OhYeah.
Hey Factchecker, why did Industry Super Funds stop itemising Adviser Fees in their accounts? Because they badgered ASIC to make that acceptable.
Industry super have spent 25 years screaming like a banshee about Adviser Commissions and adviser’s costs in general.
Now Industry Super want to promote the biggest theft of HIDDEN COMMISSIONS ever seen.
And yes charged to every member, when most will have NO SERVICE.
All to promote ISF FUM retention, via tied sales agents in call centers that will be uneducated and unqualified.
But hey if Industry Super change the name from COMMISSIONS to Collective Charging, that will somehow make it different.
Hypocrisy from ISF beyond belief.
“Premium adjustments”
Intra-fund advice is not personal advice, and cannot ever be* personal advice. At least get that right before going on a rant. It is a completely different proposition to the role of a financial adviser. Intra-fund advice is a general advice service available to all super fund members, with costs often rolled up as part of the administration fees. That advice is often all that some members need – they don’t need to find $5,000 to go and get personal advice when their situation is pretty simple.
As the commenter above says, some people don’t read a PDS, or use the online portal, or call the call center. Are you saying that the fund should work that through and give those people discounted fees for those things too? Because it is the same argument – ‘if you didn’t call the contact center this year, you’re being charged a fee-for-no-service’. Get real and stop sensationalising.
*Section 99F(1)(b) of the Superannuation Industry (Supervision) Act 1993.
Maybe there’s a bit to be said when legislators apply two different ethical models to the pragmatism and compliance of advice provision within super.
It’s not a far leap to make an argument that the outcomes derived from this approach are intrinsically hypocritical.
This is particularly apt when the two approaches are likely to clash into each other with the introduction of the NCA.
Advisers well within their rights to call out hypocrisy. This is not a good example of it, but a flavour of things to come.
So who pays for intra fund advice delivery?
The tooth fairy?
Sharpen up.