The new Super Sorter tool provides consumers with an end-to-end process to consolidate super which Colonial First Sate general manager Geoff Peck said will help consumers avoid excess administration fees.
“That $18 billion number alone is staggering but the thought of the total flat fees being paid in these lost or unclaimed super accounts is alarming,” Mr Peck said.
“These fees are directly eroding the retirement savings of Australians.”
According to Mr Peck a number of superannuation funds charge a dollar based administration fee of around $1.50 per week or $78 a year.
“When you compound that across four or five accounts, you are looking at around $312 to $390 per year in administration fees alone,” he said.
“Customers need to realise they can reduce the amount of admin fees or ‘empty dollars’ they are paying by simply consolidating into one super account.”
A campaign conducted by Essential Super found one of its members aged 21 already had 12 different super funds.
Mr Peck said the real value of members finding their super is that ultimately it will form part of their retirement benefits.
“It is actually an individual’s money, they are entitled to it and they should actually have it under their control,” he said.
Again banks prioritising fund flows above the best interests of their clients. How does any institution know the client may not be doing self harm to their current investment situation by blindly consolidating? They don’t and they don’t care they just want your inflows.
There is also member protection for small account balances. Sometimes people are better off keeping numerous small funds….anyone ever think of that? This rollover everything exercise really should be treated with the caution it deserves. No fee would compensate an adviser for the cost involved in consolidating various small super thanks to having to do a product replacement table for every fund within the 50 page SOA. I’m told ASIC are really focusing on product switching…must only apply to advisers. Everyone else is exempt.
Loss of benefits include addressing any insurance levels and this is overlooked as many super account holders do not know they even have levels of insurance within their super – account holders stand to lose this insurance if they simply roll all supers into one which is the current advertised action being stated – where is Duty of Care and who is responsible in event of possible future insurance ???
Does this Super Sorter tool also tell the client about any lost benefits/which is the best super to roll into etc? If not, how can it allow clients to rollover without full disclosure?
My understanding was that super switching needed justification as to the super being rolled into.