Weaven backs ACA trail attack
Industry Funds Services chair Garry Weaven has called on the Australian Consumers’ Association (ACA) to extend its proposed investigation into trail commissions to superannuation.
“We would like the Australian Consumers’ Association to go one significant step further and investigate trail commission arrangements in superannuation,” Weaven said in a recent statement.
The ACA flagged it would be putting trails paid to advisers under the microscope in a report in Choice magazine, which called for the complete abolishment of trail commissions.
Weaven said the ACA has “done all Australians a real favour” by investigating trail commissions paid to financial planners by fund managers.
The ACA has “highlighted a real issue of which consumers may not be aware”, he said, but the investigation would not be complete without extending the investigation to superannuation.
“If there is cause for concern regarding commissions paid on managed funds, that concern is magnified when it comes to superannuation, where commissions can persist over a working life-time.”
Weaven said financial planners who are paid trail commissions could not avoid a conflict of interest when giving advice to their clients, and that this charge cannot be justified on compulsory superannuation contributions.
“Members of many retail super funds are charged trail commissions, which erodes their hard earned retirement savings — and this practice should be stopped.”
Most planners and accountants are not recommending Industry Super Funds because they do not get paid trail commissions, Weaven said.
“This is despite industry funds having been shown to be among the lowest cost and best performed funds in many surveys, over many years, and operates only to profit members.”
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