Government effectively leaving you vulnerable to raids on super

Government decision means financial advisers can effectively ‘steal’ from your super.

Government effectively leaving you vulnerable to raids on super

Super fund holders will be left vulnerable to raids on their accounts by financial advisers should a government proposal to allow grandfathered commissions to continue.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry recommended that grandfathering arrangements for conflicted remuneration in relation to financial advice provided to clients should be removed as soon as possible.

And yet the proposal to rebate grandfathered commissions to clients would effectively nullify one of the key recommendations of Kenneth Hayne’s royal commission, says Industry Super Australia (ISA) – a move contrary to the Government’s repeated assurances it will uphold all 76 key recommendations.

According to ISA, the Government’s legislative proposals “basically provide an exemption to the blanket prohibition by allowing a rebate/monetary benefit scheme to be set up (as well as record keeping obligations)”.

ISA chief Bernie Dean slammed the proposal and, in an ISA submission, has called on the provisions for conflicted remuneration to be repealed as soon as possible – in line with Commissioner Hayne’s recommendation.

“Let’s not forget that grandfathered commissions remove money from consumers’ accounts without their express consent. This is akin to stealing money,” said Mr Dean.

“This is money that would otherwise have been maintained, in a consumer’s account, and instead was siphoned off to pay financial advisers for nothing.

“To claim administrative inconvenience as an excuse to try to water down what should be a blanket ban on grandfathered commissions, is astounding given the disgraceful conduct that was exposed during the royal commission.”

According to Mr Dean, this is not the first time the retail fund sector tried to coerce the Government into an arrangement to permanently allow grandfathered commissions, which the sector previously did when it tried to subvert the Future of Financial Advice legislation overhaul.

“While some parts of the super sector will fight tooth and nail to keep grandfathered conflicted remuneration provisions – at the expense of consumers – our position is clear,” he said.

“We do not support a watering down of the blanket prohibition on grandfathered commissions. Any attempt to provide exemptions for conflicted remuneration will only erode consumer protections and leave consumers worse off.”

Are you still paying for fees and advice you received in the past? Do you think the Government should repeal grandfathered conflicted remuneration as soon as possible?

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    COMMENTS

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    TREBOR
    2nd May 2019
    11:13am
    And so the quantity of blood let is steadily being reduced, bit by bit, and the perpetrators of the bloodbath are steadily permitted to carry on business as usual...
    ozrog
    2nd May 2019
    11:18am
    Scomo looking after his mates again. Criminal.
    jackie
    2nd May 2019
    11:46am
    TREBOR....Greed and corruption are insatiable and will never stop until it destroys itself. I am surprised by the number of Australians voting for Clive Palmer. They think this Liberal pawn is wonderful.
    MICK
    2nd May 2019
    1:54pm
    Correct TREBOR.
    We've already seen the Commonwealth Bank now say they'll sell their wealth arm "in the foreseeable future. That means its keep it.
    We've already seen the criminal CEOs who led the fraudulent behaviour of banks avoid any and all prosecution and fines which would hurt them. Ok you can't fine the top end of town as though it were a criminal rabble can you!

    If there were fairness in the world then there would have been real penalties rather than the "we can do better" we had to listen to. And then there's the cost of conducting this inquiry.

    Just like after the GFC in America the criminals are exempt from prosecution and help accountable. They call that justice. I call it top the end of town cartel which is exempt from prosecution. The courts are a joke.....as most of already appreciate.
    Waiting to retire at 70
    2nd May 2019
    11:21am
    The Guardian 4th February 2019
    "Yes, the Morrison government has said meekly, to everything the banking royal commissioner Kenneth Hayne has recommended.
    In political terms, it’s blindingly obvious why. A federal election is in sight. The Coalition is vulnerable on this issue, having spent years obstructing a deeply necessary inquiry that unearthed a trove of malfeasance – case studies that still beggar belief. [ScoMo voted against the Royal Commission 26 TIMES].
    Scott Morrison at one point opined rashly that calls for a royal commission into the banking sector (after a string of scandals that, in the end, proved the tip of the iceberg) were a “populist whinge."

    So this is your idea of "Yes" Scumo, sorry .. ScoMo. NO! Actually, I mean sCUmO!
    jackie
    2nd May 2019
    11:50am
    Waiting to retire at 70.....The Liberal Government have their backs covered. Their rich greedy donors will make sure they get back in and their political pawns will collect votes for them too. They only allow the rich to migrate here because they have the same disease called GREED and corruption.
    thommo
    2nd May 2019
    2:23pm
    I agree with you 100% Waiting to Retire. Greed and a lack of compassion and humanity is the problem with the LNP and similar conservative governments.
    Labor's policies generally are about equitable fairness, although I must note for example that they refuse to reset the assets test to pre Jan 2017 rates.
    And on that point, the media is full of Labor's franking credits policies and the more well off retires who are whingeing about losing some of their income because of it..
    Well, when several thousand part age pensioners either lost or had their pension reduced (in my case by $14K per year, which has stuffed up my retirement) after Abbott and Morrison changed the assets test as from 1.1.17, these same people didn't give a toss, because it didn't affect them.
    Well now the boot is on the other foot.
    And by the way, me and about another couple of million pensioners will be waiting for the LNP with a baseball bat in each hand come the election on 18,5,19.
    And good riddance to them..
    Rae
    2nd May 2019
    3:27pm
    I agree thommo.

    That hit n retirees did not go without consequences. It added to the decline in retail and hospitality sales.

    The franking credit will ht consumption as well. Just handing it over for childcare and $8500 to property investors won't help spending at the local shops.

    I lost around $10 000 plus the concession card. Obviously doing the right thing wasn't bloody good enough for the LNP and Greens.
    Waiting to retire at 70
    2nd May 2019
    4:18pm
    Just a baseball bat Thommo?

    You're just too kind to Scum.

    The LNP (Losers, No-hopers and Parasites) also impacted the retirement plans of many, mine included, when they changed the rules for maximum amount held in super.

    I planned and was saving for years to get to the highest level on super before the cut off for total assets. Not that I wanted a pension, as I DIDN'T. I just wanted the security of a Seniors Health Card to give me some dignity as my health declines. That's gone now and any major illness I end up with will need self treatment with Nembutal.
    Farside
    2nd May 2019
    7:04pm
    thommo, do you really think another couple of million pensioners will be waiting for the LNP with a baseball bat in each hand come the election on 18,5,19 or is that just wishful thinking? History tells us voters have short memories so there may be fewer protesting than you think.
    TREBOR
    2nd May 2019
    7:08pm
    It goes back further than that - the deterioration in industrial relations and worker rights started under WorkChoices is bearing fruit in the lower incomes derived for honest work, and the current opportunity of managers and employers to simply dispense with workers at whim and to operate on a part-time casual basis .....

    All this broken employment for the many inevitably results in far less superannuation and opportunity to prosper over a working life, and thus impacts directly on the retiree budget of government. Periods of unemployment mean liquidating assets to stay alive, and sometimes even home loss, and re-building over and again is a costly exercise, as I can vouch. Don't start on certain social policies, either... you do not want to go there, but suffice to say it is a huge part of the betrayal of the loyal, hard-working etc man I mentioned in the strand on 'life getting harder for the renting retiree'...

    It really is a book in itself... but unless signed by a Learned Professor of social science, the kind who would never touch such a subject for fear of having their ideas and preconceptions polluted (there is no money in discussing privileged White men being ripped off endlessly), would be labeled a 'manifesto' like Tarrant's.

    Send in the clowns, indeed....
    Not a Bludger
    2nd May 2019
    11:51am
    Don't believe anything that the union boss controlled Industry Super Association or it's rentseeking boss trys to proclaim.
    Yet another biased column from YLC
    Waiting to retire at 70
    2nd May 2019
    12:14pm
    You need to get up earlier!
    SFR
    2nd May 2019
    2:25pm
    LNP thank you again Not a Bludger, cheques in the mail.
    Rae
    2nd May 2019
    3:29pm
    Yep you can't trust those bosses. You know they killed 157 workers last year alone. It's certainly not right.
    jackie
    2nd May 2019
    4:05pm
    Not a Bludger.....Union Super Funds have made the most money for their customers out of all existing Super Funds.
    Tom Tank
    2nd May 2019
    4:38pm
    Wrong AGAIN Not a Bludger. The Industry Funds are controlled by a Board of Trustees which are governed by Government Legislation and have equal representation of Employers and Unions.
    I am afraid that either you are peddling LNP party propaganda or are just ignorant of the facts. Perhaps both apply.
    Tom Tank
    2nd May 2019
    4:38pm
    Wrong AGAIN Not a Bludger. The Industry Funds are controlled by a Board of Trustees which are governed by Government Legislation and have equal representation of Employers and Unions.
    I am afraid that either you are peddling LNP party propaganda or are just ignorant of the facts. Perhaps both apply.
    danielboonjp
    2nd May 2019
    11:58am
    Australian Ethical Investment Fund still hasn't returned insurance premiums for death cover.
    pepa
    2nd May 2019
    12:02pm
    I fully agree on the biased comments and reporting. I wonder if people have long enough memories back to when our interest rates were 18% This was a labor government then. Bill Shorten is like a child with a full money box Wants to spend all our money and then borrow from China again just like Kevin Rudd.
    porthboy
    2nd May 2019
    12:08pm
    What an utterly pathetic comment!
    Waiting to retire at 70
    2nd May 2019
    12:13pm
    Delusional comment actually
    jackie
    2nd May 2019
    4:08pm
    pepa...The Liberal Government has been doing a great job groveling up China's backside. Unfortunately, the Chinese are much smarter than the Liberals.
    Mondo
    2nd May 2019
    4:11pm
    Pepa. What has the underhanded deceit of the current LNP government got to do with interest rates 40 years ago? Are you suggesting that every self or vested interest deed this government does for its paymasters can be excused by an event of decades ago? You say biased, ever looked in the mirror?
    Farside
    2nd May 2019
    7:24pm
    Pepa, hopefully the folks who remember the 17% interest rates in 1989 are smart enough not to be misled by the headline rate. They should understand that if a couple buying a house now, their mortgage interest rate would be a fraction of that rate, and the adult wage is higher. Assuming household income of $90K and applying the "30 per cent of income" decision-rule to determine how much they can afford to spend each year on their mortgage, they could service a mortgage almost $400K

    In real terms, that's more than three times the value of what they could have afforded in 1989.
    Cowboy Jim
    3rd May 2019
    9:10am
    Yep - I was there with my 17.4% interest mortgage 1983. "the recession we had to have". We all hope never to see that again, was the first time we downsized through necessity. Won't do it again. Good luck and may your candidate win.
    floss
    2nd May 2019
    12:29pm
    Was it Mr.Morrison now our P.M . stood up and said 26 times there is no reason to have a Royal Commission into our major banks, can this man be trusted to run Australia.
    KSS
    2nd May 2019
    12:42pm
    Can Mr Shorten who short changed the very people he was meant to represent in favour of feathering his own nest and filling union coffers with money meant for training which of course never eventuated? The same Mr Shorten unionist who shortchanged union members by lowering payment rates in favour of boosting payments to the union?

    Can he be trusted to run Australia?
    SFR
    2nd May 2019
    2:26pm
    Non can be trusted
    TREBOR
    2nd May 2019
    5:02pm
    So shorten is undermining the outcomes of the royal commission?

    Well - you learn something every day.... and all this time I thought it was Morrison...
    Spitfire
    7th May 2019
    11:30am
    Remember the bugger you know is better than the one you may have to!!!
    floss
    2nd May 2019
    12:34pm
    As I commented before Not a Bludger please join the real world, what ever you are on for your own sake give it up.
    Misty
    2nd May 2019
    7:26pm
    Pepa too.
    travelman
    2nd May 2019
    1:43pm
    It took the people and the other political parties years to get this pathetic government to accept a Royal Commission being dragged kicking and screaming all the way. So is it any surprise that having agreed to accept all the R.C recommendations, they are now failing to implement some of them - if they are re-elected you can forget them implementing all the recommendations. What a waste of space this government is from Scott Morrison down to Tony Abbott the very bottom of the heap. One thing about a Labour government - there is no way they will behave so despicably as the Coalition - everyone give the Labour Party a go and forget the crap about unions, so-called tax increases and Bill Shorten and his popularity, after all we are voting for the future of our nation not a beauty contest.
    KSS
    2nd May 2019
    1:55pm
    "there is no way they will behave so despicably as the Coalition".

    hahahahahahahahahahahahaha
    Caky
    2nd May 2019
    1:52pm
    Saw on the Brisbane news last night that Childcare is going up again I don't know how people afford to pay that t said about $140 a day why work unless your on good money and I mean over $1000/week that is the women I mean. Mr Shorten was ranting the other night that Child Care if he got in would cost nest to NOTHING!!! Who shall we vote for??
    jackie
    2nd May 2019
    4:16pm
    Caky....All the people having children can afford them. They get welfare despite both parents working at good jobs. Most mothers prefer to have a break from their children and the money they earn goes toward nail salons, hair extensions, fashion and botox. People that can't afford children don't have them any longer.
    TREBOR
    2nd May 2019
    5:06pm
    True, jackie - this is the REAL welfare - pensions and unemployment are paid out of
    social security, a long-ago paid for right.

    When people talk about 'welfare' in that disparaging tone, they always think this somehow includes only pensions and UB, when the reality is -apart from those being Social Security - welfare crosses all boundaries... and nowhere more so than with the current multi-billion dollar subsidies to childcare and other related issues such as PPL...

    As if a 'family' on two incomes of $150k pa can't budget to HAVE a family... everyone on far lower levels of income managed....
    SFR
    2nd May 2019
    2:22pm
    thieves running rampant with the governments blessing.
    TREBOR
    2nd May 2019
    5:08pm
    “The television business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free and good men die like dogs. There is also a negative side…”

    Dr Hunter S Thompson

    Read banking for television and you've got it right...
    thommo
    2nd May 2019
    2:31pm
    My super fund has fees for 'management' (ie account fee) and advice fees....About .8% for each, which costs about $10K per year for both, which is about $100K over ten years (enough to extend retirement funding for several more years).
    Banks don't charge these fees for having your account in the bank.
    This just emphasises the exorbitant fees charged by Super funds, and it is outrageous, but our government does absolutely nothing about it. What a bunch of morons...Another reason to get rid of this LNP government at the next election.
    Jacky
    2nd May 2019
    2:48pm
    We sold an investment property when the assets test changed so we could get the pension. Put the money into super with CBA - Colonial First State. Did very badly, had bad advice and changed to Australian Super and made more in one year than 2 years with CBA. Very hard to work out how much you pay in fees but obviously, it is not as much with Australian Super. Everybody should be aware that their financial adviser is working for them and not their employer.
    SFR
    2nd May 2019
    3:06pm
    The banks mightn't charge you fees but you get next to nothing interest as well.
    Rae
    2nd May 2019
    3:38pm
    0.8% is a tad excessive. I'd renegotiate or move funds. I'd certainly be using the advice quite a bit and asking very hard questions if the fund wasn't doing incredibly better than the indexes. If they can't beat the index then what is the point of paying high fees?

    You can always move to another cheaper fund.

    A good index fund charges around 0.24%. They also have superannuation options .
    Adrianus
    2nd May 2019
    3:58pm
    thommo, you need to do a cost/benefit analysis. You obviously need the regular advice, otherwise you wouldn't be paying for it. You obviously see the value in that advice, otherwise you would find somewhere else to park your $1,250,000. Its a good time for a review with Bill Shorten's Labor and Greens leading in the polls. They'll come for your retirement savings, then for your home.
    Aussiefrog
    2nd May 2019
    6:11pm
    Thommo you're lucky .8% of $1,000,000 is $8,000
    So you have more than $1,000,000
    Misty
    2nd May 2019
    7:30pm
    Dont be ridiculous Adrianus.
    Rae
    3rd May 2019
    6:44am
    Adrianus retirees savings is the only money left so yes it would be wise to avoid as much sovereign risk as possible. Investing outside super and in foreign assets is making a lot of sense.

    I'd be on the case for that advice as you say. Make them work for the money.

    Markets are running hot again.

    If you didn't make $60 000 to $80 000 on that million over the past 3 months you need to ask what the hell the fund is playing at. And keep asking until they explain.
    Mondo
    2nd May 2019
    4:38pm
    This is not a biased article as some suggest, this intention by the government was reported on by the mainstream media weeks ago. It proves yet again and again we can't trust any of the major parties and it proves that this so called compulsory voting democracy is a sham. We are compelled to vote for parties that use and bribe the people, us, to get in and once in power then do the bidding of their paymasters be they unions or big business. Then comes the next election, and as Morrison says forget the past (except for Labors) listen (to the lies) to what we are promising to do for you in the future (with your money in ten years time). Vote independent and keep the lying bastards honest!
    Aussiefrog
    2nd May 2019
    6:12pm
    Why am I not surprised?
    Misty
    2nd May 2019
    7:34pm
    Thank God we only have 2 weeks and a bit to go, I don't know about anyone else but I am fed up to the back teeth of these political ads from all parties, if people haven't made up their minds by now, who they want to vote for, then all I can say is, where have they been for the last 6 years?.
    Cowboy Jim
    3rd May 2019
    9:19am
    More like where have they been for the last 12 years, Misty. That is when the rot really started and both sides of politics have responsibility for this. I would like to see a totally new team running this place and no proportional voting. As it is now I have to preference people I absolutely do not want because I have to fill in all the numbers. Give me first-past-the-post elections.
    professori_au
    2nd May 2019
    11:02pm
    As I predicted, the industry will fight tooth and nail to lobby government to water down recommendation by the Rpyal Commission. The LNP only set up the Commission due to public outcry and not in the public interest but in the political interests of the party and the vested interests they generally support. While the Commission did a good jobbrining to attention the fruadulent and corruption of the industry, the parameters were set to try and constrain the objective of the Commission. Gradually it will return to business as usual. The public needs to keep pressure on the industry to wipe out its bad and greedy practices. Wee, the public will continue to be the victims of the greed and corruption until it is reined in.
    Rae
    3rd May 2019
    6:53am
    Yes exactly. Forewarned and forearmed and hopefully not too lazy to put pressure on the funds to lift their game.

    How many are checking fund returns and comparing them to index returns and if not better asking why not and what they are paying for?
    professori_au
    3rd May 2019
    11:15am
    I would also add that the fines imposed are not consistent with the behaviour.
    For example if a corporation makes a $1M profit from bad behaviour then the fine to be consistent should also be $10M, plus I would sugggest gaol time for the senior management for supporting the misbehaviour. If only a smaller fine is imposed they are still making profits from the behaviour.


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