all

No More Commissions for Financial Advisers?


Tuesday, April 6th, 2010

In an effort to combat higher fees and lower results, financial advisers in Australia may be prohibited from charging commissions on sales related to pensions and investments, based on recommendations from the Cooper Review of superannuation, said The Australian.

Another recommedation from the Cooper Review of superannuation would be to disallow financial advisers from hiding charges in the prices of the products offered, rather than having them upfront. There would also be a requirement for financial advisers to set their commissions totally in dollar terms.

If the changes are implemented, they would be put in place sometime near the end of 2011, although it could extend longer than that, depending on how it all unfolds..

According to David Whiteley, chief executive of the Industry Super Network, private super funds are in need of change, as "the more you pay for super the less you get."

“On average, for each additional 1 per cent paid in fees, members of the largest public offer super funds lost almost 1.5 per cent in net returns.

“Only all-profit-to-member funds were found to have had above-average returns and below-average fees. Conservatively, 4 million Australian workers pay year by year for financial advice they don’t receive.”

Jeremy Cooper, who chaired the review, said near the end of 2009, “Most members don’t engage with super, and for them we envisage a fund where the product is simpler and cheaper." Cooper was referring to the possible creation of universal funds for those investors who are disengaged.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: cooper review , financial advisers , superannuation