You will be sadly mistaken if you thought that the Future Of Financial Advice (FOFA) Legislation would stop financial advisers from receiving commissions from your superannuation account.
Under current FOFA Legislation, if commissions or other forms of hidden remuneration were being paid to a financial adviser prior to 1 July 2013 they can continue to be paid forever! You may have ceased doing business with your original financial adviser many years ago but they may still be receiving commissions or other forms of payments from your superannuation account.
Fortunately, when it comes to superannuation commissions, there are some actions you can consider taking to improve the situation. Don’t make the mistake of thinking this issue does not apply to you: it is an issue that potentially affects millions of superannuation accounts.
Firstly, contact your superannuation account provider and ask if anyone is receiving fees, commissions or volume bonus payments from your superannuation account. If a financial adviser that you do not want is attached to your account, discuss the process and implications for having them removed and organising for any fees, commissions or volume bonus payments to be rebated back to you.
Secondly, if you feel you need advice or a second opinion on your options, do some research and arrange an appointment with your chosen financial adviser to discuss your financial advice requirements, needs and concerns.
Thirdly, if a financial adviser is attached to your superannuation account who receives commissions and you want to retain their services, contact the adviser to negotiate new ongoing service arrangements on a fee for service basis.
It is important to note that cancelling financial adviser arrangements that commenced pre 1 July 2013 and establishing new arrangements with your financial adviser now will give you additional Legislated benefits. Importantly, those additional benefits include providing agreed services to you for the agreed fee and making contact with you every two years to renew the agreement.
Taking action might even prompt your financial adviser to recommend a cheaper superannuation account as the changes above should prohibit them from receiving commissions and other forms of hidden remuneration from the original fund.
If you have been involved with a financial adviser that uses an in-house superannuation account, it is probably time to seriously review your options as it might be costing you dearly and the solutions to stopping hidden fees are not as simple as they should be. The disclosure obligations for in-house superannuation accounts are also less than satisfactory.
At The Financial Advice Shop we offer a cost effective Financial Advice Health Check to assess your situation and it might assist you to check if your superannuation fees are too high because of hidden fees, commissions or other payments. We understand the industry extremely well, so for more information or to understand your options more clearly, contact us without delay.
#commissions #superannuationfees #superannuationcommissions #superannuation