One of Australia’s superannuation funds, Sunsuper, has announced the introduction of financial advice fee caps to ensure that financial advice remains affordable.
The initial fees will be limited to the lower of $4,400 or 2.2 per cent of balance (inclusive of GST) and restricted to only being payable once every three years, with the cap for the ongoing fees to be lowered to $6,600 or 1.1 per cent of balance per annum (inclusive of GST) and payable monthly for a maximum of two years.
The fund said that it started working with external financial advisers a few years ago to offer both advisers and clients the flexibility of charging and paying fees for financial advice related to a client’s Sunsuper holdings directly from the client’s account.
Sunsuper’s head of advice retirement, Anne Fuchs said that these new advice fee caps would be more consistent with a duty to act in their members’ best interests.
“We believe these caps will strike a balance between preventing members ’balances being eroded by ongoing fees while at the same time allowing financial advisers to deduct fees for the quality advice they provide,” Fuchs said.
“The Royal commission has put a spotlight on advice industry and highlighted community expectations in relation to advice fees. We anticipate that other super funds will be reviewing their trustee obligations around advice fees and will follow suit in implementing such caps.”
The new caps came into effect on 25 February, 2019.