Did your super fund charge you fees illegally?

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Retail banks have shown the same contempt for their superannuation customers, in some circumstances, as they did for their financial advice clients, the banking royal commission revealed this week.

On Thursday, seasoned AMP Super chairman Rick Allert admitted under questioning that members of an AMP Super Directions product would have been better off keeping their funds in a regular bank account.

Mr Allert said the AMP trustee had recently raised an issue with one of the entities managing AMP clients’ super after media reports revealed a cash option AMP super product produced a negative return of 0.39 per cent over a three-year period.

He told the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that an AMP entity had agreed to cut its fees from 1.2 per cent to 0.5 per cent after these facts surfaced.

The commission heard that AMP’s superannuation trustee, which is legally bound to represent members, had outsourced all of its operations to other AMP entities, the Sydney Morning Herald reported.

Mr Allert was unable to say how many fees the fund pays to related entity AMP Life for managing the superannuation of tens of thousands of customers.

In earlier news on Thursday, ANZ Bank admitted to collecting more than $2 billion by requiring tellers to encourage customers to roll their superannuation into one of the bank’s own pension products.

In a more revealing admission, however, the bank said the strategy was highly risky with the main threat being that customers would end up worse off when they switched.

The Sydney Morning Herald reported that senior counsel assisting the commission, Michael Hodge QC, tabled an ANZ presentation that stated: “The key risk that the sale of SmartChoice Super presents is that customers switch their superannuation without understanding the potential consequences and end up with a less suitable product than their existing fund.”

Questioned by Mr Hodge as to whether the bank’s head of superannuation, Mark Pankhurst, was aware of this risk to customers, the latter agreed that he was.

Along with the Commonwealth Bank (CommBank), the ANZ has been blocked by the Australian Securities and Investments Commission (ASIC) from selling over-the-counter super products “because of concerns their ‘financial health checks’ left customers thinking they were getting financial advice”.

On Wednesday, it was revealed that CommBank’s subsidiary, Avanteos, kept charging fees to deceased superannuation customers for up to a decade.

“On this (2015) review, the conclusion we made was that the practice should cease and should never have occurred,” CommBank executive Linda Elkins told the banking royal commission. 

Although the bank admitted that it had discovered the illegal practice in 2015, fees continued to be charged to dead fund members until recently.

National Australia Bank (NAB) also charged more than 4100 dead super members $3 million in adviser service fees after the trustee knew they had died, SBS reported.

Transcripts are available of hearings earlier this week involving Colonial First State, Catholic Super, SCS Super, Suncorp, Hostplus, Colonial First State, QSuper and Suncorp. Transcripts of Friday’s sessions will be available on Saturday.

A handful of superannuation funds are still waiting to front the commission. Also still anticipating a grilling are the regulators, ASIC and the Australian Prudential Regulation Authority, who will likely be asked why they weren’t tougher in enforcing financial services rules on banks, insurers and super funds.

Has your superannuation fund been quizzed by the banking royal commission? If so, how will the information revealed in the hearings likely affect you? Will you consider seeking advice over the potential illegal charging of fees to your super account?

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Written by Olga Galacho

31 Comments

Total Comments: 31
  1. 0
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    AMP? A Retail Fund? Say no more.

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      I just wish that you would say no more! You are such a troll and an ALP paid one at that.

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      On the contrary, Mick is a sensible counterpoise the the Lieberal shills, trolls and hacks who infest YLC with their Rightard garbage.

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      Ha ha ha ha ha ha ha, sensible counterpoise, now I’ve heard everything. Are you a paid ALP troll as well?

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      GDay Mick, just ignore those others, not worth replying to

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      Thanks johnp. I have to smile when cash for comment posts are put up. Roy is one of the team who do this and you can always see how they operate: no substance gutter attacks on Labor, Shorten and unions. They can’t discuss the facts because these are damning for the government.
      The article ONCE AGAIN points to the well established conclusion that Retail Funds are wealth traps which offer poor returns and high pay to CEOs and the management team you all are a part of the big end of town.
      Genuine readers here will by now understand that Industry Funds so self managed funds are the only way to go. Black and white no matter how much BS the trolls put up.

  2. 0
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    Let no reader ever forget that all senior members of the government, led by The Finance Minister, Mathias Cormann, the responsible Minister, Kelly O’Dwyer, The Minister for Revenue and Financial Services and the Prime Minister, Malcolm Turnbull, all categorically argued that there was absolutely no reason to have a Royal Commission into the banking sector and had to be lead kicking and screaming before it happened!!!
    Now we have division in the Coalition with many wanting to stop the proposed NEG which promises a 35% reduction in energy costs yet approve a $65 million hand out to big business and banks??
    Is this the government for “the people”????

    • 0
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      Happened under labor and LnP’s watch but only the LNP has taken decisive action on banking super and energy in the interest of ordinary Australians

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      Come on Olbaid, decisive action be blowed, they had to be dragged there kicking and screaming. It was the opposition and minor parties that FORCED them to have the Royal Commission.
      And how generous you are with your next post saying that the poor banks and financial institutions “make mistakes”. They BROKE THE LAW and cheated for years and have been caught.
      And how kind of the CBA to cancel over $100 MILLION in ANNUAL bonuses as a result of the Royal Commission, peoples’ hard earned money that would have been in their pockets by now had it not been for the enforced Royal Commission.

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      It’s government for the RICH people.

      @olbaid ” but only the LNP has taken decisive action on banking super and energy in the interest of ordinary Australians “

      Only because they were forced into it, kicking and screaming all the way.

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      olbaid is correct, Labor had 6 years to have a RC into the banks but delayed taking any action. Why?? They instead chose to whinge about the banks for 6 long years while in government.

  3. 0
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    Some banks , retail and industry funds made mistakes
    Let’s hope they all learn from this and improve their practices from now on
    Better legislation will prevent these sorts of issues in future

  4. 0
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    Is the commission going to look into the Government – Local, state and Federal – Super funds?

  5. 0
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    I got automatically slotted into a QSuper account for Gov workers (as a teacher here in Qld). As I was not full-time, the amount deposited was not enough to cover their withdrawals. I got a phone call from an irate lady worker saying I need to put more money in so they can take it out for income insurance. I told them I didn’t want any insurance, which was a shock to the lady but they stopped withdrawals. 6 months later I got more work and unknown to me they started withdrawals again without my permission! Even though I had cancelled! I only found out recently (after 2.5 years) that they have been taking $20 pw!
    How was this possible you ask? Although the employer was the same(QGov), they made another account with the identical account number and slotted the new money into that. So I actually have 2 Super accounts with the same number! Then they restarted withdrawals. My fault that I didn’t check but how about that for brazen misappropriation?

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      … but if you challenge them over it as a matter of a real issue – they’ll flatly deny, twist, obfuscate and carry on and then tell you it’s your fault… I had the same thing with DVA.. and I have zero control over their allocation of case numbers etc….. then there was the question of the re-organised medical records that somehow lost about 300 sets……. without which a claim cannot proceed……

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      On the other hand Daz, a colleague was able to receive 85% of her salary when she was undergoing treatment for breast cancer through QSuper insurance. Made a huge difference to her life for 12 months

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      You’re absolutely right Sundays. I also know a case where a lady was off for 18 months or so and got paid through. However, most of the time that the $20 was being withdrawn from my account, I had not eared enough to make it worthwhile i.e. in that 4 years, I was able to work full time for 6 months. So for about 2 years, had I been injured or sick, they would have given me 85% of next to nothing…which is next to nothing. There is no due diligence on their part to see if the person is earning or not. When I enquired the guy told me they cannot know or be responsible if a person leaves their employment. So, they just keep on milking it. It stinks! All benefit & no accountability for them.

  6. 0
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    Yep, avoid the banks funds, the retail funds etc and go with an Industry Super Fund but first do your research into which one

  7. 0
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    Personally I don’t give a redest arse who you all blame, the fact is the companies mislead and some from the workers.
    I worked for the govt and paid into an AMP super/life fund for years. When I was injured out of the workforce AMP Eroded it down to $900 and the was NOTHING I could do about.
    Now they should be made to pay, end of!

  8. 0
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    The Royal Commission that the Libs said we did not need.You are way off the mark Roy, Mick
    is just one person that is worried about how people are getting ripped off by this corrupt government.

    • 0
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      Mick is only interested in getting his labor mates into power

    • 0
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      And you’re only interested in keeping your Lieberal mates in power.

    • 0
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      Ha ha ha ha ha ha, all these paid ALP trolls that infest this once interesting site.

    • 0
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      Now we have an apparent new one: olbaid. Really Old Geezer. Changing your name doesn’t fool anybody.
      Labor will win the next election because the current government is in a death spiral. Whilst I would prefer to see a diverse group of Independents control the parliament like they do in some well run countries in Europe Labor will be an improvement on the despots currently in power. To remain a democracy and to avoid becoming another America requires that the current lot are sent on their way. Shortly.


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