ASIC warns Australians to check their superannuation balances after savings vanish
Australians are being urged to check their super accounts after shocking cases emerged of retirement savings being almost completely wiped out.
Australians are being urged to check their super accounts after shocking cases emerged of retirement savings being almost completely wiped out by excessive fees.
The corporate watchdog has revealed that some super trustees failed to detect huge charges, risky account switching and other warning signs that left members thousands of dollars out of pocket.
In one alarming case, a person’s entire retirement nest egg was virtually erased.
Sign up to The Nightly's newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.“One member, for example, had almost 100 per cent of their balance eroded by fees — inappropriate fees that weren’t picked up by the trustee,” ASIC Commissioner Simone Constant said.
“Almost 100 per cent of their balance.”
In another case, members using a particular financial advice model lost, on average, half of their super to fees.
“That’s pretty harmful stuff,” Ms Constant said.
The warning follows the collapse of Shield and First Guardian, which is estimated to have cost more than 11,000 Australians about $1 billion in retirement savings.
ASIC found too many super trustees were focused on preserving relationships with financial advisers instead of protecting members’ money.
It also uncovered alarmingly high advice fee caps, with one trustee allowing charges of up to $25,000 and another seeking approval for a $30,000 cap.
Three trustees had no upper dollar limit on some percentage-based fees, leaving the door open for massive deductions from members’ accounts.
ASIC has warned trustees that they face tougher scrutiny after releasing its 29-page report into how retirement savings are being protected.
“We’ll be going deeper, we’ll probably be even more public about names and profiling practices, and we won’t be backing away from enforcement outcomes too,” Ms Constant said.
She urged Australians to pay closer attention to their superannuation.
“Superannuation is so important to almost every working Australian now that we’re encouraging Australians to engage with your super as you do with your banks,” she said.
Australian super platforms manage almost $300 billion, with advice fees totalling $2.2 billion.
Originally published on PerthNow
