Transfer all retail funds to MySuper: Whiteley
All retail super fund balances should be transferred to MySuper products from 1 July 2015 to prevent further commission payments being paid where no advice is being provided, according to Industry Super Network (ISN) chief executive David Whiteley.
Referring to Rainmaker research commissioned by the ISN that estimates retail fund members paid an estimated $3 billion in commissions in 2010, Whiteley said it is inappropriate to grandfather commissions paid to financial planners where no advice is being provided.
"The MySuper reforms are intended to address workplace default arrangements where no advice is provided," he said.
"ISN analysis of Roy Morgan Research suggests more than 2 million Australians are in this boat - paying money for nothing. Where these commissions are being paid on compulsory superannuation and without any financial advice being received by the member, these payments are morally indefensible," he said.
The $3 billion in commissions in 2010 were split between super investment ($1.9 billion) and group and personal insurance paid for from super ($1 billion), the ISN stated.
The research also estimates that in the three years from 2008 to 2010, $1.9 billion was paid in commissions to financial planners on employees' compulsory super contributions, according to the ISN.
"On this basis, all existing account balances must be transferred into no-commission MySuper accounts from 1 July 2015," Whiteley said.
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