Investors distracted by the commissions versus fees debate are overlooking a more vital issue, according to the chief of a financial services dealer group.
Australian investors need to concentrate on whether they will have enough money for when they do eventually decide to stop work, Professional Investment Services chief executive Robbie Bennetts said.
“Most investors have little or no financial training and are happy to take the default option for their superannuation guarantee contributions… [this option] may not suit the contributor’s specific needs or risk profile, and could put them in a position where they will not have adequate savings to retire on,” he said.
“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 way that makes sense to the particular client receiving it.
“For some, this may mean a low cost option solution as offered by industry funds.
“For others, this may mean a comprehensive solution, taking into account all of their circumstances, which is the domain of the financial adviser,” Bennetts said.
Along with ensuring clients have sufficient savings, the main focus for industry and retail funds should be to provide access to effective advice, Bennetts said.
Most financial advisers already offer clients a choice between upfront fees or commissions, he said.
