POWERED BY MOMENTUM MEDIA
Government bans super risk commissions
The Federal Government has made a move to ban all risk commissions within superannuation in what it says is an effort to put consumers first.
From 1 July 2013, the government has proposed to ban all up-front and trailing commissions for both individual and group risk within superannuation, as set out in the amended Future of Financial Advice reform package.
The Minister for Financial Services Bill Shorten announced the new reforms yesterday, stating that the fees and charges within superannuation come at the cost of foregone retirement savings.
The Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos said the announcement came as a surprise to many people, and that the potential impacts will need to be assessed.
“Certainly there was an expectation that risk commissions in default funds would be banned, but where a person actively seeks advice in relation to increasing their super there was an anticipation that commissions would still be able to be paid,” Vamos said.
“We want to make sure that for many people the payment of an upfront fee does not dissuade them from seeking advice on their options.”
“The last thing we want is that people are encouraged to buy their insurance outside of superannuation,” she added.
The reform package stated that the proposed ban will not extend to risk commissions outside of superannuation, as expenditure on insurance is tax deductible to super funds.
AUTHOR
Ashleigh McIntyre
Recommended for you
A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets.
Earlier this month, several Australian superannuation funds fell victim to credential stuffing attacks, which saw a small number of members lose more than $500,000.
Small- to medium-sized funds have become collateral damage in an "imperfect" model for super industry levies, a financial institution has said.
Big business has joined the chorus of opposition against the proposed Division 296 tax.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
37.15 3 y p.a(%)
3
GAM LSA Private Shares AU I
33.96 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
Plato Global Alpha A
28.73 3 y p.a(%)
