Money to be made by delaying My Super system move
THE major superannuation funds owned by the big four banks could earn an extra $600 million in commissions over the four years to June 2017, new research has claimed.
Research by Rainmaker Information, funded by the industry-owned superannuation sector, shows the extra commissions could be earned by delaying moving customers to the new My Super system.
The My Super system was created to help customers avoid extra fees used on typical "set and forget" funds, but the super industry has until June next year to move clients on to the system.
Industry Super Australia chief executive David Whiteley said the bank-owned funds seemed to be taking sales commissions off "mum and dad investors", despite the system already being available for customers.
The research comes as the ISA urges the Abbott government, through its financial system inquiry, to ensure dividends are paid to fund members before shareholders.
Mr Whiteley said it was difficult to reconcile the "fiduciary duty" of retail super funds with a decision to leave members in higher fee products when a lower cost product was available.
He said the practice could lead to some Australians retiring with less in their super. But efforts to change financial advice rules by the government would allow such commissions to continue.
The Australian Bankers' Association has previously backed the original Labor reforms.
The Association has also previously supported the government's proposed changes, arguing the reforms would give consumers lower cost and easier ways to do their banking.
Those reforms, currently the subject of a bill before the Senate, have been opposed by Labor, The Greens and some crossbench senators, but have the support of the Palmer United Party.
- APN NEWSDESK