Clients might be getting swindled by paying for fees that don’t have to be disclosed in industry funds’ product dashboards.
Australian Ethical’s Adam Kirk has raised concerns that some funds are now charging an additional insurance administration fee that clients are unaware of, and the latest draft superannuation regulations don’t require it to be reported.
Net return target, level of investment risk and net return performance must be included in the dashboard. A statement of fees and other costs is also mandatory, but this excludes insurance fees and costs for members.
“Under the new proposed regulations, we’re concerned that insured members will not be aware of the additional administration costs they may pay for insurance if they rely solely on the product dashboard information when comparing funds,” said Kirk.
Under the new MySuper regime funds must provide “opt-out” insurance to all default members so many may not be aware they are being charged extra fees unless they have an adviser or consistently read fund communications.
Kirk says that charging an additional fee for a feature that is already being included seems “out of touch with current regulatory requirements for better disclosure/transparency of member costs”.
He says that it is vital to consider these additional hidden fees when comparing funds, to consider the actual “whole cost” of the fund.
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