An “infiltration” of commissions into the corporate superannuation market is causing “wide-ranging and insidious side-effects” for consumers according to a statement by actuarial groupRiceWalker.
The group says it has recently seen a move by commissioned agents into the market, which has come in tandem with commission structures being introduced into products.
According to RiceWalker, the trend is beginning to distort consumer decision making and product selection as well as influence product design as it says has been evident in the retail market.
The statement from RiceWalker attacked the regulatory regime, arguing the impacts of the commission trend extend beyond what it can deal with, with consumers to be “the big losers”.
The group says the main reason for the trend has been the money that can be made from the market, as it says with the move to master trusts “billions are there to be won” by institutions.
However, the group suggests other reasons for increased commissions include the “deliberate” complexity of financial services products making it hard for consumers to determine true cost, the reliance on commission-based agents to distribute products, as well as ignorance among consumers of true cost.
The group believes members of corporate superannuation funds should have a choice between accepting a trail commission or paying a fee at the time of advice, or not receiving advice at all and not being charged.
