Wasted energy on commissions vs fees

Robbie Bennetts

The debate over commissions versus fees has distracted Australian investors from the more important issue of their levels of retirement savings, according to Professional Investment Services chief executive Robbie Bennetts.

Bennetts said rather than debating the issue of fees versus commissions, industry and retail funds should focus on getting effective advice to consumers, particularly since most advisers offered clients a choice between upfront fees or commissions.

“Instead of wasting energy on the debate over upfront fees and ongoing commissions, the industry should focus on getting effective financial advice to Australia’s working population in a form that makes sense for the particular client receiving it,” he said.

“For some, this may mean a low cost option solution as often offered by industry funds. For others, this may mean a comprehensive solution taking into account all of their circumstances.”

According to Bennetts, it was critical for Australian investors to know they have enough savings to retire on.

“Most investors have little or no financial training and are happy to take the default option for their superannuation contributions,” he said.

“Traditionally, this is a conservative option and may not suit the contributors’ specific needs or risk profile, and could put them in a position where they won’t have adequate savings to retire on.

“This is why the role of the financial adviser is critical. The average member does not have the level of financial literacy required and should outsource this important decision to a qualified financial professional such as a financial adviser.”