Make super commission-free: ISN

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Self-managed super fund owners are the most confident across the superannuation sector they have saved enough for retirement.

A recent report on Australians’ changing attitude to wealth, debt and superannuation by Roy Morgan Research shows only one in four Australians with superannuation feel they have planned enough to be financially secure in the future.

The highest proportion of superannuation savers confident of their future financial stability were SMSF owners, with 54.7% saying they had planned enough.

People’s desire to take control of their own retirement income is reflected in the growth of the SMSF industry, SMSF Professionals’ Association of Australia (SPAA) chief executive Andrea Slattery said. SMSF assets have recently grown to $531.5 billion.

Members of industry super funds are the least likely to believe they have planned enough, with only 23.3% confident in their financial future.

Industry Super Fund chief executive David Whiteley puts that down to industry super fund members typically being younger, so not as engaged with their retirement savings as typically older SMSF owners are.

He said industry super fund members’ confidence will increase as they get more free advice from super funds.

“It’s a service, so the approach we take if somebody is compelled to save for their retirement, the very least we can do is provide them with advice on how to do that. That’s a basic service and it certainly doesn’t justify a commission or an ongoing commission fee which financial planners like to extract from people’s super.”

Whiteley said there are three things which will increase people’s superannuation balance for when they retire. Firstly, ensure low income earners super rebate is retained; secondly, ensure the super guarantee increases to 12%; and thirdly – stop financial planners getting commission.

“We need to ensure people aren’t paying sales commissions and incentives to financial planners. We need to make sure superannuation is commission-free, and that will add tens of thousands of dollars to people’s superannuation savings.”

Super fund members may be unconfident they have saved enough for retirement, but Whiteley said “what we do know” is their confidence exceeds that of members of super funds run by banks.

“The one thing people know about industry super funds is it is only run to benefit and profits its members…They can have the confidence that all profits are going into their pockets for their retirement.”