Superannuation Fees To Go Under Federal Government Microscope

Post by Sharat on April 29, 2009 · Under Savings, Super Funds, Wealth Management, investments · Comment

The Federal Government plans to oversee more carefully, the fees that retail investors must bear when purchasing or investing in superannuation investment products.

Superannuation minister Nick Sherry wants the Federal Government to review and scrutinise fees and commissions generated by financial planners and brokers when they advise their clients on superannuation investment strategies and products.

The Government hopes to examine the structure, operation and efficiency of the sector. Mr. Sherry in an interview with ABC said that the fees and commissions structure is a concern for many people.

“Why aren’t the fees coming down, why don’t we have lower fees in a compulsory system? We know from international experience that as a system grows and we have got one of the largest systems in the world – fees come down. It hasn’t happened in Australia.” Mr. Sherry said

Mr. Sherry made the point that the fees and commissions charged by superannuation products had implications on the amount of funding available to people when they reach retirement age.

“The important thing about fees is that if you have a 5 per cent long-term rate of return after you have 1 of 2 per cent fees, those fees reduce your retirement savings very significantly by the time you get to your 60s,” he said.

The Combined Pensioners and Superannuants Association has welcomed the Federal Government’s plans for greater scrutiny of superannuation fees and commissions.

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