Super funds charged fees for no service, royal commission hears

The financial services royal commission is examining superannuation in a two-week public hearing in Melbourne.

A number of Australia's large superannuation funds, including the already scandal-hit AMP, have admitted to charging consumers fees for no service.

The banking royal commission has previously revealed Australia's largest wealth manager AMP charged customers fees for financial advice they did not receive.

AMP has also admitted to issues with fees for no service regarding superannuation, as the royal commission shifts its focus to Australia's $2.6 trillion super industry.

Senior counsel assisting the commission Michael Hodge QC said a number of super fund trustees have admitted misconduct or possible misconduct concerning fees for no service.

"AMP, CBA and IOOF have acknowledged fees-for-no-service conduct that we believe must have affected the trustee or trustees of the superannuation fund within their respective retail groups, although they may not have made that specific link in their submissions," he said on Monday.

National Australia Bank's superannuation trustee NULIS has also acknowledged it engaged in misconduct or conduct falling below community standards and expectations in relation to superannuation, he said.

The Commissioner Kenneth Hayne during The Royal Commission's initial public hearing into Misconduct in the Banking, Superannuation
Source: AAP

During an opening statement on Monday, Mr Hodge also mentioned other industry players such as ANZ, Westpac and StatePlus in relation to consumers being incorrectly charged fees or for paying for advice they did not receive.

Public submissions to the royal commission about superannuation have also raised concerns about fees-for-no-service, as well as the provision of insurance by super funds that consumers had not sought.

Mr Hodge said concerns have been raised about fees for financial advice, management or administration that have not been disclosed to the consumer or resulted in any service being provided.

He gave an example of a fund charging ongoing management fees without adequate explanation after three years of those fees being charged.

Mr Hodge said the examples also included inappropriate fees charged by financial advisers, including a consumer who was charged adviser fees despite taking out the superannuation policy directly with the super company in the absence of a financial adviser.

Published 6 August 2018 at 10:34am, updated 6 August 2018 at 12:45pm